Last February, the value of the production of electricity and telecommunications works spun 32 months of annual falls and extended what is already the longest crisis that this branch of the construction sector has faced since 2006, when the National Institute of Geography and Statistics (Inegi) began measuring the indicator.
Measured in 2013 pesos, the value of electrical and telecommunications works during the second month of the year was 734 million 698,000 pesos, its second lowest historical level after that of the previous month, January, when the indicator bottomed out registering 717 million 256,000 pesos.
The electricity subsector is thus the furthest behind compared to pre-pandemic levels, with a drop of 57.7% in February 2022 compared to the same month in 2020, far exceeding the average for the sector (-11.6%) and other items such as construction works (-19.7%), water, sanitation and urbanization (-9.6%) and transportation (-6.8 percent).
Compared to December 2018, its last peak, the February drop is 78.2 percent. The annual falls of the indicator began, in turn, in July 2019, eight months after the government of President Andrés Manuel López Obrador began, so to date there are already 32 months of setbacks in 12-month comparisons.
This crisis coincides with a change of direction in the public policies of the electricity sector of the current government, all with the common denominator of strengthening the market dominance of the Federal Electricity Commission (CFE).
On the whole, government investment (in electricity infrastructure) has been minimal and, on the other hand, private investment is being chased away and it is hindering all the projects that were under way, including some that are already operating. All this has led to a paltry investment in the sector”, says Edmundo Gamas, director of the Mexican Institute for Infrastructure Development (Imexdi).
Among the most relevant measures, the cancellations of a tender for the construction of a transmission line from the Isthmus of Tehuantepec to the center of the country stand out – which would serve to expand the venting routes for wind generation in that region – and another tender to build another line that would connect the national electrical system with the isolated system of Baja California. “Since the beginning of the current six-year term, the transmission lines have been canceled, the large projects that were essential to unify the national network that could take advantage of renewable energy, especially wind energy from Oaxaca and the South,” said Gamas.
In addition, this government suspended electricity auctions for the purchase of energy for basic supply and power, which practically stopped the construction of new generation plants to meet future electricity demand.
CFE does not grow capacity
At the same time, the CFE has had practically no relevant investments to expand its electricity capacity so far in the six-year term and it was until the end of last year that it proposed new projects, such as the construction of six combined cycle plants, the repowering of its hydroelectric plants and the construction of a photovoltaic park in Puerto Peñasco, Sonora.
“The CFE has gone very slowly trying to bid and then ended up directly assigning the new gas generation plants, largely because there is resistance from the private sector to enter these works because the payment schemes have not been very clear or have given confidence”, adds Gamas. By the end of the six-year term, the outlook is not encouraging, because although the initiative for constitutional reform in the matter of electricity did not prosper, which proposed returning to the CFE the monopoly of the sale of electricity to the final consumer and definitively canceling the electricity auctions, thanks to the Supreme Court of Justice, the reforms to the Electricity Industry Law of 2021 remain in force, which establish a new order for the dispatch of electric power that relegates private generating plants.
“The IP is absolutely scared away. It is difficult to think that there will be a lot of private investment in the six-year term because the uncertainty is total, the new generators are not sure if they are going to be allowed to interconnect.