AMLO electricity counter-reform would affect businesses commitment to using alternative energy

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According to Sener, there are 239 self-supply plants registered, which represent 12% of the current generation.

In Mexico, more than one company uses the self-supply scheme to move its operations, so the federal government’s electricity reform and the cancellation of these permits could not only increase rates, raise inflation and the loss of competitiveness of the country, but also it would bankrupt these plants, putting energy security at risk.

And it is that in the country there are companies, such as Bimbo, FEMSA, Cemex, Grupo México, Alsea, Walmart, among others, began to migrate years ago from the use of fossil fuels to alternatives such as wind or solar, in fact, there are cases where already 80% of the electricity they consume comes from one of these alternatives.

According to the Ministry of Energy (Sener), there are 239 self-supply plants registered, which represent 12% of current generation; However, nevertheless, the government justifies the changes by arguing that there are more than 77 thousand consumers that depend on these plants, in addition to not paying the postage to the Federal Electricity Commission (CFE).

For the specialist Paul Sánchez, partner of Perceptia21 Energía, there is no certainty of what will happen to these plants, since on the one hand, the government says that they will respect them and not expropriate, on the other they will change the office and where the self-supplies will be able to deliver energy electric power once the CFE plants are dispatched.

The analyst explained that, for example, if 100 Megawatts (MW) of energy are required and the Commission can give 80, they will only assign 20 of the remaining ones who will compete for cost decide to buy the same CFE, so they can bank them to bankruptcy.

Paul Sánchez indicated that that is why there is talk of indirect expropriation, since, by not letting them operate, they would be forcing them to sell or leave the market; where the Commission could buy these assets at scrap price.

“The industrial rate could vary between cents and pesos, which would have a devastating effect on the competitiveness of the country and a terrible inflationary effect because we are talking about soft drinks, bakeries, stained glass, porcelain, metals, automotive”, said the partner of the consultant.

In addition to paying for an energy security problem, because CFE plants cannot maintain an operating capacity of 100%, in fact, forced exit rates are above 25%, that is, a quarter of the time they fall for maintenance or failures.

For Citibanamex, if this initiative is approved, it could translate into higher prices or subsidies, since the problem is that the CFE’s energy is the most polluting and expensive, on average 50%, while wind and solar in the auctions of long-term prices have been shown for a third of the Commission’s combined cycles and up to a fifth of hydroelectric plants. 

The financial institution agreed that the risks of insufficient development of the electricity supply for the country’s growth increase, since the displacement of the private sector implies investments from the public sector that do not correspond to the current capacity of the government.

In this sense, Alfredo Álvarez, EY’s leading energy partner, considered that the elimination of Clean Energy Certificates (CELs) could affect the arrival of new investments since many companies worldwide are taking Paris commitments very seriously. and with their governments to reduce emissions.

“The CFE has no way of being able to issue these international certificates that clean energy, so a company that already has within its budget to be receiving these certificates of its investments in Mexico and suddenly overnight also If you take them off, it will generate a very important imbalance, which can also lead certain companies to make decisions to change their manufacturing centers because in the end, they have a commitment to both their governments and their customers, ”he says.

What companies have little by little said goodbye to the CFE?

In recent years, several companies have opted for several companies in the country that have undertaken a strategy of migrating to fossil fuels as an energy source, towards cleaner alternatives in their operations.

For example, the cement company Cemex currently 30% of its electricity consumption comes from the Federal Electricity Commission, while the remaining percentage comes from renewable energy, according to its president in Mexico, Ricardo Naya, who last week said that analyze the impact of the reform.

“We are analyzing the possible implications… it is too early to say what the final result of that law will be, but what I can tell you is that we are working with chambers and associations to try to inform or give alternative points of view or what the possible implications are. of that law, especially with regard to our climate action, “he said.

In turn, América Móvil (AMX), owned by Carlos Slim, had a plan for 2020 that 50% of the energy would come from clean sources, a goal that was close to reaching in 2019, registering progress of 94%, according to the sustainability report for that year.

While the history of Walmart in Mexico and Central America is similar, currently 63% of total energy consumption comes from sustainable sources, however, it has the goal of reaching 100% by 2035, as indicated in its “Report Financiero and ASG 2020, A year of stories ”.

In the document, the self-service store chain highlights that, as part of its strategy, last year 13 million tons of CO2 were avoided, due to the participation of 188 suppliers through the Gigatón Project in Mexico.

In addition, it highlights that the transition to operations with 100% renewable energy by 2035 is an ambitious goal; Therefore, in addition to 6 wind power parks and 2 hydroelectric plants supplying energy to their operations in the region, they also have on-site photovoltaic power generation for 15 units.

“Energy efficiency has been key in these achievements, so we have invested 449 million pesos in Mexico and 100 million pesos in Central America to continue our transition towards LED lighting and photovoltaic cells”

In turn, the Mexican FEMSA and owner of Oxxo in 2019 expanded the use of clean energy in its manufacturing plants in Mexico, reaching its original goal for 2020 of 85%, according to a report from the firm.

In fact, it stands out that more than 15,500 work centers in the Mexican Republic are supplied with renewable energy and more than 77.6% of the necessary electricity is supplied with clean sources, avoiding the emission of 721,995 tons of CO2.

In addition, it recently announced that 70.1% of Oxxo stores in Mexico are supplied by renewable sources, since through contracts with 5 wind farms in the country “we satisfy 69.4% of our electricity needs.”

Meanwhile, Grupo México, owned by German Larrea, has also embarked on a path towards renewable energy in its operations, since the consumption of electricity from these alternatives in 2019 was 1,413 GWh, representing 18.6% of total consumption.

Most of this energy came from hydroelectric plants that supply mining operations in Peru, and in that year made it possible to avoid the emission of 305,270 tons of CO2, as well as the El Retiro wind farm with 74 MW capacity, developed and operated by the Infrastructure Division in southern Mexico.

“To reduce the environmental impact of its high consumption of electricity, Grupo México will continue to increase the use of renewable electricity in its operating processes. Thus, a goal was set to increase the use of renewable electricity to 25% by 2022 ”, he assures.

The businessman Ricardo Salinas Pliego has also taken a step in this direction, such is the case of Grupo Elektra, whose consumption of renewable energy in the company represented 23% of the total in 2019, but claims to have the objective of increasing this proportion.

“The goal for 2020 is to maintain the current energy demand in branches and a similar or higher consumption of renewable energy per company – around 35% for Tiendas Elektra and Banco Azteca – which would translate into an 8% increase in renewable energy for Banco Azteca and 14% for Elektra Stores from 2019 to 2020 “

While Bimbo is another of the companies that have undertaken a strategy to migrate from fossil fuels to cleaner alternatives, in its operations in the Mexican Republic, 80% of the electricity used by Bimbo is renewable; where the Piedra Larga Wind Farm, in Oaxaca, supplies 70%, in addition to having solar roofs,

Last February, the president of the bakery, Daniel Servitje, highlighted in a conference with analysts that last year they increased their global use of renewable electricity, going from 49% to 80%, meeting our 2020 objective and advancing in their commitment to achieve a 95% by 2023.

“We hope to increase our investments in electric vehicles. And in some cases, we also invest in renewable energy on our rooftops and in some other areas, but most of the investments go basically to the plant, the bakeries and the increase in development capacity ”, Servitje said.

The restaurant operator Alsea, owner of brands such as Starbucks, Vips or Domino’s, points out in its 2020 annual report that in the country the clean energy purchase mix increased (wind energy, cogeneration or hydro), going from 45.24% in 2019 to 62.37% at the end of last year.

Source: forbes.com.mx

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