With the sale of 13 Iberdrola plants to Mexico to be operated by the Federal Electricity Commission (CFE) the federal government will achieve its objective that the State productive company dominates the national electricity market, which can bring consequences, according to specialists.
Market concentration in a single company can bring distortions in competition that will be reflected in the price to consumers, considered Casiopea Ramirezconsulting partner Fresh Energy Consulting.
Continue reading: Iberdrola stops its investment in Mexico
“It’s a coup too strong for him mercadoconcentrates both the installed capacity and the energy generation in a single company and therefore, it can exercise its market power at its convenience, either by manipulating prices or putting up barriers to new entrants, among other measures”, he commented to The Sun of Mexico.
The expert in electricity market regulation added that the CFE does not like competition, which puts consumers at risk, as they will have to pay rates imposed by the state company, now dominant in the sector in the country. Tamaulipas industrialists spoke on Tuesday, after the announcement of the purchase and showed their concern about the strengthening of the CFE.
LakeFederation of Industrial Chambers (Concamin) He said that the agreement will be good, as long as the government guarantees competitive prices to all sectors of the country.
“The government has the obligation to guarantee the operation of these plants and the supply of energy at competitive pricesthe agency said.
Meanwhile, the president Andres Manuel Lopez Obrador defended yesterday the purchase of 13 plants from the Spanish Iberdrola and the monopoly of the CFE Gonzalo Monroy, managing director at GoldenSilver Consulting Group, said that the supply of these plants to various companies should not change, but that it is possible that some renegotiation later.
Another issue behind this purchase, added Casiopea Ramírez, is that it reaffirms the country’s dependence on fossil fuels, such as imported gas.
“With this, the possibility of reaching our clean energy goals is compromised, not to say eliminated,” he said.
Meanwhile, Iberdrola plans to more than double its renewable energy capacity in Mexico. José Sainz, Finance Director of the Spanish company, mentioned in a call with analysts that with the sale, half of the company’s capacity in the country will be renewable, with 2,400 megawatts of operation.
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He added that the company will stay in the country and will continue to invest in order to develop up to six mil megawatts of capacity renewable energy.
Sainz stressed that the sale of the assets is part of the company’s global decarbonization strategy, with which Iberdrola in Mexico reached 90 percent of its rotation plan.
