AMLO to discuss power reform with US energy secretary

: Electricity
22/01/17

Mexican president Andres Manuel Lopez Obrador will meet with US energy secretary Jennifer Granholm in Mexico City this week to discuss his controversial electricity reform bill that sidelines private investors.

"We are going to discuss all the issues but, above all, we are going to inform her about the reasons behind the electricity reform," Lopez Obrador said at this daily press conference today.

Lopez Obrador sent a constitutional electricity reform bill to congress on 1 October that would restore state-owned power utility CFE's market dominance by prioritizing its dispatch and capping private-sector participation at 46pc.

The reform would revoke all private-sector generation permits — some 40,924MW, or 48pc, of Mexico's installed capacity — in a move industry lawyers say will violate the constitution and trade deals, including the US-Mexico-Canada free trade agreement (USMCA).

US diplomats have voiced concerns about the reform and the issue was also raised ahead of a March 2021 meeting between US president Joe Biden and his Mexican counterpart.

Mexico's government argues the reform does not breach free trade agreements as it draws on the state's constitutional right to prioritize the public interest over private-sector interests.

Mexico explicitly reserved its sovereign right to change the constitution and other legislation on energy matters in Chapter 8 of the USMCA, the government has said.

Lopez Obrador's Morena party is short of the two-thirds congressional majority required to pass the constitutional reform bill. The government is hoping to persuade opposition PRI party legislators to vote in favor of the bill in congressional forums that start today.

By Rebecca Conan

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

24/12/18

UK government underlines its commitment to net zero

London, 18 December (Argus) — The UK government has re-emphasised its commitment to the country's legally binding target of net zero emissions by 2050, and says it is acting either fully or partially on all recent recommendations from the independent advisory Climate Change Committee (CCC). The CCC in July found that "urgent action" was needed if the UK was to hit its climate goals — but it was based on the previous Conservative administration's policy. The current Labour government had taken power just two weeks previously. "The inheritance of this government was that we were not on course to rise to the climate challenge or seize the opportunities of action", the government said this week. It set out in detail its action so far on a variety of issues — including renewable power, sustainable transport, domestic heating and biodiversity — as well as future plans. The government will in 2025 publish an update on its plans for "fully delivering" the fourth, fifth and sixth carbon budgets, it said. Carbon budgets are legally binding and place a restriction on UK greenhouse gas (GHG) emissions over a five-year period. Carbon budgets 4-6 cover the timeframe 2023-37. It will also set the seventh carbon budget — which covers the period 2038-42 — by June 2026, alongside a strategy "setting out the next phase of our pathway to net zero". The UK has cut GHG emissions by 53pc between 1990 and 2023, provisional data show. It met its first three carbon budgets, which collectively covered 2008-2022. The government has taken several steps since winning the July election, including lifting the de facto onshore wind ban, approving renewables projects and awarding the first permit for carbon transport and storage . It has also slightly watered down its pledge of "clean power" by 2030, to 95pc from 100pc, although it also provided clarity around reaching the target in an action plan released last week. And UK prime minister Keir Starmer last month unveiled an ambitious GHG reduction goal at the UN Cop 29 climate summit. The UK has a headline goal of cutting GHGs by 81pc by 2035, from 1990 levels, and will set out its plan to achieve that "in the coming months", the government said this week. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Argentina’s renewables to get boost in 2025

24/12/13

Argentina’s renewables to get boost in 2025

New York, 13 December (Argus) — Argentina's renewables sector is looking at a rosier outlook in 2025 supported by new legislation and improved economic conditions. The country's renewable energy legislation, which was enacted in 2015 and expires at the end of 2025, stipulates a target of 20pc participation of renewables — excluding hydropower plants greater than 50MW — by the end of 2025. The country has not met annual targets, but there is growing confidence that it could come close to the goal by the end of next year. Renewable sources covered 15pc of the demand in October, according to the latest report from the energy secretariat, up from 13.5pc in July. The country added 373MW in new renewable generating capacity in the first three quarters of this year. The trade organization of wind energy CEA, estimates that 700MW in new solar and wind capacity will be added in 2025. A replacement renewable law focused primarily on investment, which the ruling Libertad Avanza party plans to submit in early 2025, and economic deregulation underway has the sector confident that financing for projects will soon be readily available, ushering in a boost in private investment for renewables. Ignacio Criado, a partner at the Tanoira Cassagne law firm who focuses on renewable energy, said he expects the country to be close to the 20pc renewable target by the end of 2025 and that there will be sustained growth in coming years. "More players are interested in the construction of renewable energy plants, with solar power in the north and wind in the south," said Criado. He said that the country's increasing economic stability and a government program providing incentives for large-scale investments, known as the RIGI, are fostering interest among investors. Argentina's economy, while still in tough shape, has improved in the year since president Javier Milei took office. While annualized inflation is still in triple digits, the monthly rate fell from 25.5pc in December 2023 to 2.4pc in November, according to the statistics agency. It was 112pc in the 12 months through November. The economy shrank by 3.4pc in the first half of the year and will contract by around 3pc the full year, but is expected to grow by 5pc in 2025, according to the IMF. During a 10 December address marking his first year in office, Milei said tax reform and elimination of exchange rate and customs controls would be forthcoming, adding to investment flows. RIGI boost The administration has already received requests under the RIGI mechanism for $11.8bn in investment, primarily in energy projects, Milei said. Among the projects in line for the RIGI is the state-owned YPF Luz's 305MW El Quemado solar plant, the first stage of which should be ready by 2026. In early December, the state's energy wholesaler, Cammesa, awarded a contract for eight new renewable projects with a combined capacity of 561MW. It received 31 proposals for a total of 1,639MW. Of the projects, 345MW were awarded to Genneia, the country's largest renewable company with more than 1GW in installed capacity, and 88MW to Australia's Fortescue for its Cerro Policia wind farm in the southern Rio Negro province. The energy will be used for its planned low-carbon hydrogen project. These projects should start coming on line from the end of 2025 in throughout 2026. As of October, Argentina had 6.56GW in installed renewable capacity, including 4.12GW in wind, up by 11.2pc from a year ago, 1.63GW in solar, up by 19.6pc, and 82MW in biogas, up by 5.4pc. It also had 524MW in small hydroelectric plants and 201MW in biomass, with no new capacity from a year earlier. Large-scale hydroelectric plants totalled 9.63GW, while thermal electric plants totalled 25.28GW and nuclear plants 1.75GW. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Norway's 500MW cables at risk if price link proved

24/12/13

Norway's 500MW cables at risk if price link proved

London, 13 December (Argus) — Norway will not replace the two oldest transmission cables between it and Denmark, with a combined capacity of 500MW, if the national transmission system operator (TSO) confirms they "harm the national power system", energy minister Terje Aasland told Argus . If the Skagerrak 1 and 2 cables are found to contribute to "high prices", as seen this week, and additionally "reinforced negative price contagion", the minister explained, the government will not renew the cables. The minister's comments come as the ruling Labour party's programme committee — of which the minister is not a member — agreed to block extending or replacing the ageing cables as they approach the end of their operational lifetime. There has yet been no formal application to renew the Norwegian-Danish Skagerrak 1 and 2 links, which the minister said means "there is nothing to say yes or no to" at the moment. Norwegian TSO Statnett is currently investigating the possible renewal and, alternatively, the effects of not renewing the link, the minister confirmed. Skagerrak 1 and 2, commissioned in 1976 and 1977, respectively, are part of a trio of cables, including the 500MW Skagerrak 3 interconnector connected in 1993, linking Norway's NO2 with Denmark's DK1 bidding area. By Daniel Craig Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US rail group optimistic about 2025 rail demand

24/12/12

US rail group optimistic about 2025 rail demand

Washington, 12 December (Argus) — US rail volume is likely to start strong in 2025, but railroads will need to navigate changing federal policies, the Association of American Railroads (AAR) said. Volume next year hinges on a few key factors, including the resilience of consumer spending, strength in the labor market, and the trajectory of inflation and interest rates, the group said. Railroads will need to remain vigilant as these economic indicators will be critical in helping assess rail traffic and broader economic health in the months ahead, AAR said. "Strong intermodal growth and stable consumer demand offers reasons for optimism," AAR said. "But railroads and the economy alike must navigate evolving policies and potential disruptions" as the US enters 2025 under a new administration, the group said. The AAR'S optimism comes as rail traffic in November "while by no means stellar, suggests that the broader economy remains on stable footing", AAR said. US intermodal rail volume set new records in November. The increase reflected strong consumer demand following job gains that pushed increased spending, AAR said. Intermodal traffic is made up primarily of consumer goods shipped in containers between different modes of transportation, although some scrap metal and specialty agriculture products ship this way. US railroads loaded an average of 282,000 intermodal containers and trailers per week, up by 11pc from a year earlier. That was the highest weekly average for any November since AAR began tracking intermodal data in 1989. Carload traffic fell by 3.8pc compared with November 2023. Carload traffic is primarily made up of commodities. Coal was the "biggest problem", AAR said. US railroads loaded 15pc less coal last month compared with a year earlier, while year-to-date loadings were down by 14pc from the same 11 months in 2023. If coal were excluded, monthly US carload traffic in November would have notched a 10th consecutive year-on-year increase. Industrial products volume was down by 1pc from a year earlier. Manufacturing is a major driver of US carload traffic, and that sector remains sluggish, AAR said. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EPA defends 'good neighbor' efficacy

24/12/11

EPA defends 'good neighbor' efficacy

Houston, 11 December (Argus) — The US Environmental Protection Agency (EPA) responded to concerns raised by the US Supreme Court in June by defending the efficacy of the "good neighbor" plan in reducing NOx emissions regardless of the number of participating states. The high court's concerns were over the issue of severability — that is, how effective the good neighbor plan would be in lowering ozone season NOx emissions if only some of the original 23 states participated. In other words, it is the question of whether the emissions limits placed on states as part of the Cross-State Air Pollution Rule (CSAPR) cap-and-trade program under the plan would have changed based on the number of participating states. In a notice published in the Federal Register on Tuesday, EPA rejected the idea that the effectiveness of the good neighbor plan — and as a result, the NOx emissions limits imposed on each state — would wane if the number of participating states changed. Instead, the agency said that its plan is "by design severable by state" because the NOx emissions limits are imposed on individual sources rather than the states themselves. Each participating state's emissions obligations depend on the number of obligated power plants, their emissions and the types of emissions reduction measures they already have in place. As a result, pausing the imposition of tighter NOx limits under the good neighbor plan in certain states does not affect the NOx limits imposed in other participating states, EPA said. In a similar vein, EPA addressed concerns that the larger version of the CSAPR Group 3 seasonal NOx allowance trading program established under the good neighbor plan would become more illiquid if it covered fewer states than planned, which could lead to a smaller supply of allowances and higher prices. Calling those concerns "unjustified", the agency said that states can withdraw their sources from a trading program by submitting their own ozone reduction plans. EPA also cited previous instances from past cross-state ozone programs where the number of participating states has changed, noting that there has been no evidence of allowance shortages. EPA also responded to concerns that it used an inconsistent methodology to determine emissions obligations for each source — including the emissions reduction strategies that could be used and their associated costs. The agency said it used a methodology that was "nearly identical to prior good neighbor rules" and considered NOx reduction technologies that have been in place "for decades throughout the US." The severability issue was raised by the Supreme Court in June, when it paused implementation of the good neighbor plan nationwide. The court majority said that EPA did not provide a sufficient explanation in response to public comments from states that highlighted those concerns — especially because, until the court issued its stay, only 10 states were participating in the good neighbor plan because of lower court stays. But in September, the US Court of Appeals for the DC Circuit allowed EPA to respond to the issue of severability, while it paused related litigation. EPA finalized the "good neighbor" plan last year to help downwind states meet the 2015 federal ozone standards. It imposed more rigorous CSAPR ozone season NOx emissions limits on more than 20 states and called for new NOx limits for industrial sources. Illiquidity has been persistent in the CSAPR market, depressing activity and keeping prices steady for almost a year because of uncertainty surrounding the numerous legal challenges against the plan. The ozone season runs from May-September each year. With plan halted for the time being, EPA has returned to less-stringent seasonal NOx budgets and reshuffled the remaining participating states into the Group 2 and new "expanded" Group 2 markets, leaving the Group 3 market empty. By Ida Balakrishna Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more