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Mexico Energy

Mexico Shuts Renewable Energy Plants, Outraging Foreign Powers

Foreign powers have expressed serious concern as the government in Mexico takes steps to shutter new renewable energy plants and take control of the national electricity system.

The measures would imperil as many as 44 renewable energy projects in Mexico worth billions of dollars, according to the European Union.

Analysts are hopeful that the government will roll back its rules, saying the measures run the risk of facing a wave of lawsuits under the North American Free Trade Agreement (NAFTA), which will soon be replaced by the USMCA.

Earlier in April, Mexico’s electricity regulator CENACE suspended the operations of new renewable energy plants. Then, last weekend, the country’s Energy Ministry issued more rules, which analysts argue are aimed at driving private companies out of the country’s energy market.

In its letter, Canada has insisted that it will negotiate with the government of Mexico to resolve the issue amicably, saying the regulations would have repercussions on the Canadian energy industry as well.

“This agreement joins a host of measures, legal and policy changes that attack investment in renewable energy in the country,” Canada’s ambassador designated to Mexico, Graeme Clark, wrote in his letter addressed to Energy Minister Rocio Nahle, according to Reuters.

The United States is also angry with the Mexican government’s decision. “Our message has always been that once you set the rules of the road … you have to respect the existing rules. You can’t keep changing them,” US Ambassador to Mexico, Christopher Landau, said at a Wilson Center discussion recently.

Mexico’s socialist President Andres Manuel Lopez Obrador has been known for such drastic actions. He seems to be of a belief that renewable energy sources will reduce blue-collar jobs as well as the government’s revenue.

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Since taking office, he has been forcing private firms to renegotiate gas pipeline contracts. Suspending the operations of renewable energy plants is only his latest move.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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