Transmission Summit 2014 Transmission investment opportunities in Mexico January 2014 Claudio Rodríguez-Galán
General Overview Power generation by the private sector. Power generation by the private sector and its coexistence with the self-supply and cogeneration existing schemes. The public power transmission and distribution service and the private sector. The Electric Energy Control Center ( CENACE for its acronym in Spanish).
Power generation by the private sector Up until the constitutional reform published on the Official Federal Gazette on December 20, 2013, power generation and retail for public service purposes was considered as a strategic area, an area that only the State could exploit. Under the premise that power that is not generated for public service purposes can be generated by the private sector, in 1992, the Federal Congress amended the Public Utility Electricity Law ( LSPEE for its acronym in Spanish) to establish the schemes under which power generation and retail would not be considered for public service purposes.
The schemes established since 1992 which partially opened the generation and retail sectors to private participation are: Self-supply Cogeneration Small scale production Independent power production (IPP) Exportation and importation
The constitutional reform has now eliminated the prohibition on power generation and retailing for public service purposes, thus creating a competitive spot market in power generation. As said prohibitions are no longer applicable, the premise that allowed the private sector to participate in the generation market is no longer necessary. The State-owned utility, Federal Electricity Commission ( CFE for its acronym in Spanish) will now be required to compete with private power companies in the power generation market.
Coexistence of 1992 s schemes with the constitutional reform SHORT TERM The schemes established in 1992 will coexist with private power companies* LONG TERM The schemes established in 1992 will eventually be replaced by private power companies *As power retailing is no longer prohibited, a surplus generated under a self-supply or cogeneration scheme may be retailed in the spot market.
Power transmission and distribution: current situation 47% of the current transmission lines are at least 20 years old. 8% of the current lines have been built over the past 5 years. Power demand is expected to grow by 4.1% annually between 2013 and 2026. To ensure a competitive market, it is imperative that the transmission and distribution system expands in a percentage higher than that of the expected growth of power demand.
Private participation in the public power transmission and distribution service: Restrictions The planning and control of the national power grid and the public transmission and distribution system are strategic areas, thus: 1. Only the State may exploit them (through CFE) 2. No concessions will be granted
Private participation in the public power transmission and distribution service: Allowances CFE may execute contracts with the private sector in relation to the: 1. Financing 2. Installation 3. Maintenance 4. Management 5. Operation 6. Extension of infrastructure for rendering the public power transmission and distribution service* *The different types of contracts to be used will be set down in legislation by Congress
The Electric Energy Control Center ( CENACE ) The CENACE* will be the decentralized, independent and autonomous body, responsible for controlling and supervising the: Operation of the National Electric System Operation of the wholesale power market CENACE *Within a period of 12 months from the date on which the amended LSPEE goes into effect. Open and nondiscriminatory access to the transmission and distribution systems
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