Mexico Now Permits Distributed Energy Generation
In Mexico, most of the electric capacity is owned and operated by the government’s Comisión Federal de Electricidad (CFE). Two decades ago, that percentage was close to 100 percent, but a set of constitutional amendments in 1992 worked to liberalize the Mexican electricity market over time. This legislation opened the operation of electric capacity to the private sector and led to the growth of privately owned capacity additions from independent power producers and industrial facilities.
Private participation in electricity generation is now open through a permitting process for independent power producers and self-supplied and cogeneration facilities (which produce both electricity and steam for industrial processes) that are often located at industrial plants, according to the US Energy Information Administration.
Capacity is also privately held for imports or exports across Mexican borders as well as for small producers under 30 MW.
Independent power producers currently sell electricity directly to CFE, which owns the distribution network and sells electricity to final end users. However, new legislation passed at the end of 2013 that focused on reforming the petroleum industry also included language to open the distribution side of the electricity market to competition by establishing an independent grid operator and trading market for electricity.
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