Thursday, July 30, 2020

Canada and Europe criticize Mexico; alert of attack and disincentives to investment in renewables

The countries pointed out that the recent measures taken by the federal administration in the energy sector jeopardize short-term investments in Mexico.

In two letters to Rocío Nahle, head of the Ministry of Energy (Sener), the European Union and Canada criticized the measures recently taken by the federal administration in the field of renewable energy and warned that these threaten investment in the sector. The ambassadors of Canada and 19 European countries sent these documents to Sener in reference to the agreement published last April 29 by the National Center for Energy Control (Cenace), with which it suspended critical tests for new power generation plants via renewable methods -which will prevent them from entering the market-, arguing that they must maintain security in the electrical system due to the health emergency derived from the new coronavirus.

“This agreement establishes various actions and strategies for operational control, which put at risk the operation and continuity of renewable energy projects of Canadian companies in Mexico,” says the letter signed by Graeme C. Clark, Ambassador of Canada in Mexico. “Companies like ATCO, Canadian Solar, Cubico Sustainable Investments and Northland Power have trusted Mexico as a country for their investments; however, the measures taken put at risk in the short term investments of approximately 450 million dollars, as well as the creation of a thousand jobs”, he added in the letter.

Both letters were sent before Sener published this Friday in the Official Gazette of the Federation (DOF) the ‘Policy on reliability, safety, continuity and quality in the national electricity system’, which also contains restrictive measures for the renewable energy sector and that will prevent its expansion in the country. “This supervening decision by Cenace to suspend the entry into operation of renewable energy plants for an indefinite period and limit the generation by operating wind and photovoltaic plants threatens to discourage private investment, including foreign investment, as several European companies transfer to us,” Read in the letter signed by Jean-Pierre BOU, in charge of business for the European Union delegation. In both letters, the ambassadors express their concern about the changes in energy that have occurred in the current administration. The Cenace measure, they affirm, joins other changes in the laws that violate the sector, such as the modification of the guidelines by which Clean Energy Certificates (CEL) are granted; the delay in authorizations by the authorities; and the cancellation of clean energy auctions.

“The European Union had already raised the concerns of several European companies involved in the development and promotion of clean energy in Mexico in the face of some government decisions that are affecting the sector, such as the indefinite suspension of electricity auctions of clean energy sources and the change in the regulation of Clean Energy Certificates ”, says one of the documents. Both the European Union and Canada asked Nahle for a meeting to assess the measures recently taken and assess the impact they will have on investments. The European Union, according to its letter, had already requested a meeting with the head of Sener that has not materialized. “Unfortunately, there has been an additional event in the sector that has increased our concerns and makes the need for a meeting with relevant government representatives even more pressing today than ever,” says the letter signed by the representative of European countries.

Source: El Financiero


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