Challenges of the Electricity Market in Mexico

The transition of the electricity sector started at an accelerated pace, cornering all companies with self-supply permits in the country.

Although the figure of electric self-supply is expected to disappear gradually, in accordance with current legislation and with the last contract granted until May 2039, the federal government seeks to cancel 110 permits with more than 77 thousand clients for the purchase and sale of energy, giving rise to legal uncertainty that predicts hundreds of lawsuits in the second half of 2022.

The controversial model of electricity generation ensured that a total of 468 private and public companies would operate their own power plants in Mexico and thus not depend on the supply from the Federal Electricity Commission (CFE), but on the parastatal network. However, with the entry into force of the Electricity Industry Law (LIE) and the creation of the Wholesale Electricity Market, the self-supply modality was deserted and today there are 347 permits waiting for their Legacy Interconnection Contracts to expire.

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