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Mexico Energy Reform: Policy Politics and land use

At an Energy conference in Mexico City last week every Mexican political party agreed that there was no turning back from the energy reform that was proposed by the current president and was enacted by the current Congress via a change to Mexico's constitution.

The fear had always been, that AMLO (Lopez-Obrador) as he had somewhat expressed in several of his Youtube presentations that he wanted to turn the clock back on energy reform.  Last week, his energy spokesman indicated that AMLO's position has been miss-understood and that he saw the current energy reform as a way forward for the country -- which face regional energy shortages.

Although the presidential elections will cause massive administrative dislocation (the first three layers of all department are political appointees) the reality is that much can proceed despite this certain slow down in the policy side of the equation.

However, for asset builders, this has often ended up killing new energy projects.  In 2017, in the south est, nearly 700MW of new green energy has been abandoned because the builders are unable to reach the grid.  In 2015 the Governor of Yucatan announced the building of nearly 900 MW of new green energy power plants (solar & wind) would be built to meet the region's growing demand.  As of January 2018, only 200 MW being built of which 100MW is not going to the grid, hence they don't face the grid interconnect issue. In fact, almost 90% of planned new power plants were abandoned because of grid interconnect. 

At the local political level, there is now a new drive to be more proactive so that new energy projects are able to connect to the grid.  Several projects are, in limbo because the local interests have no real idea as to the value of their right of way, and block all attempts at finding solutions.  Maybe I am oversimplifying the Mexican attitudes but there is a perception that not doing anything is negotiating and that time will cure all problems.  


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