Energy Sector. Implications for Organizations
The Energy Reform Initiative, PEMEX and CFE’s financial situation, as well as immigration and sustainable energy will have important implications for the companies, their costs and their energy supply. In recent years, the energy consumption from renewable energy sources has increased due to investment in the sector, lower generation costs and the global pressure to reduce CO2 emissions.
The new government led by president Andrés Manuel López Obrador cancelled co-investment projects with private companies. Some of the oldest projects were respected. However, the cancellation of more recent projects halted investment in the private sector.
The operation of CFE, adscribed to the National Energy System (SRE) works under the generation, transmission and distribution of energy. Previously private sector investment was allowed in the generation activity where CFE could only contract the complete energy transmission and distribution. Nowadays, with the counter reform coming from the Executive branch, is proposing to give preference only to CFE’s energy generation plants.
The possible future approval of the counter reform already started to generate reactions and disagreements from the private sector. he implementation of the counter reform will generate risks for foreign investors. The expected returns will be reduced due the lack of an efficient competency and regulated framework.
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