MEXICO CITY: The Mexican president’s bid to tighten state controls over electricity generation was in focus on Thursday as a top US energy official visits Mexico under pressure from his party toward more favorable policies for renewable energy use. to take away.
US Energy Secretary Jennifer Granholm, a Democrat, is due to meet with President Andres Manuel López Obrador in Mexico City at 6 pm local time (0000 GMT) after talks with members of her cabinet, including Secretary of State Marcelo Ebrard.
Ebrard said on Twitter that Granholm had shared his vision for the “huge opportunity for renewable energy in North America”.
“Mexico has such an amazing array of deep, clean resources that we want to talk about,” Grenholm said in a video message shared by the Mexican government.
US business leaders have expressed concern that López Obrador’s plan to overhaul the energy sector is curtailing investment in renewable energy.
Mexico’s left-wing president said on Thursday he would decide why he was chasing the volatility in the electricity market, and thanked the US government for being respectful of its energy policy.
López Obrador maintains that his initiative to change the constitution in favor of the state electric utility Commission Federal de Electridad (CFE) is a matter of national security, arguing that previous governments had skewed the market in favor of private capital. .
This not only undermines Mexico’s cash-strapped state-owned energy firms, but also hurts consumers and public finances, according to López Obrador, who says he is reducing the country’s carbon footprint by adding more hydroelectric power. Committed to doing less.
However, critics say that their plan to give control of the market to CFEs is hurting investments in wind and solar power, will increase costs, and due to the hydrocarbons used by CFEs to generate much of their power. Will also make Mexico dependent on fossil fuels.
It has also caused diplomatic turmoil.
Ahead of Granholm’s visit, four Democratic senators urged him and US Secretary of State Antony Blinken to “express concerns more strongly” about López Obrador’s energy agenda in a letter, arguing that it was US-Mexico. There was the “opposite” to the relationship.
“This would threaten at least $44 billion in private investment in Mexico’s energy sector,[and]negatively affect US private sector investment in Mexico,” said Senators Bob Menendez, Brian Schatz, Tim Kaine and Jeff Merkle. wrote.
López Obrador’s electricity bill is in Congress and is expected to be voted on by the end of April.
The EU ambassador to Mexico said that the recent initiative is undermining investment because it could hinder companies’ commitments to increase the use of renewable energy.
US carmaker General Motors, a major investor in Mexico, warned in November that without a solid foundation for renewable energy production, Mexico’s auto industry could suffer.
The flagship of Mexican manufacturing is struggling under López Obrador, with automotive output falling for a fourth year in 2021. The gross fixed investment level is about 16% lower than when the election was won in July 2018.
Federico Pea, the former US energy secretary, said Mexico should regard the transition to renewable energy as a “win-win” for both economies, rather than insisting on a policy that undermines US investor confidence.
“Look at the resources that Mexico has: sun, air, open space, workers,” he said. “They have experience building highly sophisticated manufacturing. They have great potential.”
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