solar panels Trial runs allowing solar parks to inject electricity into the grid have been suspended.

Appeals court rules against renewable energy credits decision

It's a big win for the industry which said value of existing assets would be reduced

A federal appeals court has reversed a decision made by a lower court on a rule change for the renewable energy sector that allowed the government to grant credits to its own existing projects.

Six foreign and Mexican renewable energy companies filed for injunctions against the new rule and the court upheld one of them on Thursday, people with knowledge of the case told the news agency Bloomberg.

The ruling is a big win for the clean energy industry, which argued that the granting of credits known as CELs to government projects would dilute the value of the credits issued to new renewable projects and severely harm clean energy investment.

The credits can be sold to large energy consumers that are required by the government to buy a certain amount of renewable energy. Their sale generates additional revenue for renewable energy projects.

The Mexican Association of Wind Energy and the Mexican Association of Solar Energy said in a joint statement last week that the rule change “destroyed the value of renewable energy project assets already in operation.”

The credits “were the main mechanism by which Mexico was to meet its national and international clean electricity generation goals,” the statement continued.

Yesterday’s decision only guarantees the value of the credits of the company that filed the injunction but other courts are now expected to follow the precedent. Bloomberg said that if more injunctions are granted in lower courts, the rule change will effectively be stopped across the country.

Sources told the news agency that there are still at least 18 injunction requests to be considered.

The Energy Secretariat could launch an appeal against the federal court decision but a prompt ruling would be unlikely and the suspension of the rule change would remain in place in the interim.

Source: Bloomberg (en)

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