By: Kate Brown de Vejar | Marcelo Páramo FernándezCarlos Enrique Guerrero Alarcón

Recent regulatory changes in the Mexican electricity sector, announced in late May and June 2020, have given rise to additional concerns regarding the viability of investments in renewables projects in the country.

On May 28, 2020, in an extraordinary session, the Mexican Energy Regulatory Commission (Comisión Reguladora de Energía, or “CRE”) adopted two resolutions which significantly increase the wheeling charges for legacy energy generation facilities (“CRE Resolutions”). Subsequently, on July 8, 2020, Mexico’s Energy Ministry (Secretaría de Energía, or “SENER”) published the 2020-2024 Energy Sectoral Program (“PROSENER”) which, among other things, seeks to give preferential treatment to Mexico’s 100% state-owned productive enterprises over privately held interests in the sector. These measures, in addition to those adopted in April and May 2020 by Mexico’s National Center for Energy Control (Centro Nacional de Control de Energía, or “CENACE”) and SENER, significantly modify the regulatory framework applicable to the renewable energy sector and affect the viability of multiple renewables projects in Mexico.

In this article, we consider the impact of these developments. In particular, we discuss the measures adopted pursuant to the CRE Resolutions and those still to be implemented under the PROSENER, their impact on renewables projects and the strong criticism which has been leveled at these developments.

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