Mexico’s populist President Andrés Manuel Lopez Obrador (AMLO) views the country’s petroleum resources as a central piece of his “Mexico First” program to support the state-owned oil and power companies, Pemex and CFE, respectively.
He has largely repudiated the energy reforms implemented by the previous administration, which brought competitive auctions for oil and gas development and renewable fuels to the power sector.
Under AMLO, changes to grid dispatch rules favor CFE generation from domestic petroleum supplies over lower cost renewable energy, eliminating the economic dispatch of electricity. Renewable energy projects in the country have been largely developed and operated by foreign investors.
Mexican officials have argued that the pivot to petroleum and coal strengthens the reliance of Mexico’s national energy system, even though there is no evidence that electric power distribution has suffered from new supplies of intermittent energy.
From the EPRINC Chart of the Week archive.