Wednesday, June 19, 2024

Iberdrola granted permit for wind farm; first of AMLO’s term

Mexico’s Energy Regulatory Commission (CRE) has granted Iberdrola a permit to generate wind energy in Guanajuato state, the first permit approved for the Spanish energy company during President López Obrador’s term. 

The CRE’s governing body unanimously approved the energy self-supply permit for Iberdrola’s Santiago plant, located in San Felipe, Guanajuato. Its capacity is 105 megawatts (MW), made up of 50 2.1 MW wind turbines. 

Windmills in Oaxaca owned by Iberdrola Energy
While the permit is the first to be granted to the firm by the López Obrador administration, Iberdrola have constructed and operated wind farms in Mexico previously. (Iberdrola Mexico)

This is the company’s seventh plant in Mexico and the first of its type in Guanajuato state.  

“This park will generate 314 gigawatt hours annually, which is equivalent to supplying electricity to some 38,000 Mexican homes. Its operation also contributes to mitigating the emission of 108,000 tons of CO2 per year in the atmosphere,” Iberdrola said on its website

The company also said that since the plant’s construction, it has supplied more than 1,000 jobs to the region. 

“As in every place where we are present, we have invested in social projects for 21 communities near the plant, which include educational programs, sports promotion and infrastructure works,” Iberdrola’s website said. “Thanks to an initial investment of 80 million pesos, these actions have benefited 6,500 inhabitants of the region.” 

Iberdrola Mexico energy plant
Iberdrola recently sold 13 power plants to the Mexican government, in a move that generated controversy. The sale ended years of legal disputes between the Spanish firm and the government.  (Iberdrola Mexico).

In April, the López Obrador administration purchased 13 power plants from Iberdrola for approximately US $6 billion, a deal the president hailed as a “new nationalization of the energy sector.” 

Before that deal, Iberdrola and the federal government had several confrontations during AMLO’s term, involving disconnections of a plant in Tamaulipas, as well as of the San Felipe plant, in 2022, plus nonrenewal of permits and fines.

The San Felipe wind farm was briefly in operation in 2022 but disconnected by order of the CRE in November. The CRE said that the Iberdrola’s permit was approved for a San Luis Potosí location and that the permit was not transferable to use in another municipality without reapplying. The ruling was opposed by Guanajuato Governor Diego Sinhue, who called it a “hard blow to competitiveness in the state.”

The CRE claimed that Iberdrola ignored the permit requirements, built the plant in Guanajuato anyway and only once it was done asked the CRE to update its permit, stating that “the investment has been large and it is already finished.”

AMLO had also previously railed against Iberdrola publicly, frequently accusing the energy company of using self-supply permits — which allow a holder to generate energy for its own consumption — to sell power to private companies.

But as the sale of the 13 power plants went through, the president retreated from his more adversarial position toward the company and said that while the federal government and the company had had their “differences,” dialogue could resolve them. 

While President López Obrador touted the sale as rescuing the Federal Electricity Commission (CFE), some critics questioned the wisdom of the sale, noting that the plants have a limited useful life. 

With reports from El Financiero and Bloomberg Línea and El Economista

Have something to say? Paid Subscribers get all access to make & read comments.
A faucet with water coming out

Mexico City’s water supply from Cutzamala system to be shut off for repair

To repair a "sudden" leak in one of the system's control valves, authorities will cut off water on Wednesday night for six hours.
Employees in an avocado processing plant in Michoacan move around large carts of avocados

US pauses Michoacán avocado inspections, citing agent safety issues

After two USDA inspectors reported an incident, the U.S. paused avocado inspections in Michoacán, Mexico's No. 1 exporter of "green gold."
Jorge Guajardo head shot

5 questions about investment in Mexico: An interview with former Ambassador Jorge Guajardo

Jorge Guajardo, former Mexican ambassador to China, answers five questions about FDI, nearshoring and Mexico's economic future.