CFE Shares Mexico Grid Project Plans

CFE Shares Mexico Grid Project Plans

This piece was originally published in the January/February 2020 issue of electroindustry.

Gustavo Dominguez Póo, Director, NEMA Latin America and Craig Updyke, Director, Trade and Commercial Affairs, NEMA

Mexico’s transition and transformation continues under President Andrés Manuel López Obrador, popularly known as AMLO, who took office in December 2018. While his predecessor, Enrique Peña Nieto, had pursued reform and partial privatization of the electricity sector to promote efficiency and new renewable generation, in his first year, AMLO demonstrated his objective of retaining federal government control of energy.

The energy sector remains dominated by the state-owned electric utility, known as CFE, and petroleum company, Pemex. Asserting that Mexico can produce all the energy it needs, AMLO slowed energy reforms begun under the previous government, ended bidding from private-sector companies seeking to build new generating plants, and shelved plans for four new long-distance transmission lines that would have facilitated interconnection with the U.S. grid.

In October 2019, Pablo Realpozo del Castillo, CFE project manager for transmission lines and substations, briefed the Mexican industry on the utility’s 2019 to 2024 expansion plans.

In the generation area in 2019, CFE began 11 new thermal electric plant projects accounting for 6,500 megawatts (MW). At the end of the year, six of those 11 are on schedule to be completed (4,200 MW), while five projects (2,300 MW) will remain under construction into 2020. RFPs for additional thermal electric projects accounting for more  than 3,800 MW and valued at over $2 billion are expected in 2020. CFE is also making investments in the modernization of 18 existing hydroelectric plants (280 MW) and conversion of 16 existing dams to produce electricity (200 MW).

In transmission and distribution (T&D), current projects accounting for 1,785 megavolt amperes (MVA), 226 circuit kilometers (CKM), and $155 million will be completed in 2019. From 2020 to 2021, four additional projects are to be completed, accounting for 1,580 MVA, 646 CKM, and $493 million in total. New projects in the pipeline account for 1,828 MVA, 1,000 CKM, and $593 million. Of those, 11 projects are planned for

bid between 2020 and 2021, accounting for 260 MVA, 224 CKM, and $72 million. Private sector companies may be contracted by CFE to build T&D projects, but CFE will own and operate them. Industry observers question whether execution of CFE plans will be enough to meet Mexico’s growing electricity demand, projected to continue to rise three to four percent annually. ei

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