Mexico City — Spanish energy company Iberdrola has been granted an electricity-generation permit under the self-supply model, after years of stonewalling by the Mexican energy regulatory agency CRE.
The CRE authorized the issuance of the permit to the company’s local renewables subsidiary Iberdrola Renovables del Bajío after a unanimous decision by the agency’s governing body, and the company will generate electricity at a wind farm in Guanajuato state, in the country’s Bajío region.
The Santiago wind farm, located in the San Felipe municipality, has a 105MW generation capacity, with 50 2.1MW turbines that will generate 241GW/h, the equivalent supply for 38,000 households.
The plant’s operation will avoid the emission of 108,000 tons of CO2 annually.
Iberdrola received authorization to generate energy with this plant in the self-supply modality with an address in San Luis Potosí state, but decided to install the plant in Guanajuato on land close to that originally planned.
The company submitted documentation for the permit for the plant in 2019, but the Covid-19 pandemic paralyzed the CRE’s activities. In March 2022, the CRE denied the permit application for the company at that address, amid multiple rejections of permits.
Iberdrola and the government of President Andrés Manuel López Obrador came into confrontation, one of the most significant of the president’s six-year term, due to the company’s bid to operate on a self-supply model, and which was described by the government as “illegal” because the company operated with a permit but by selling the electricity generated to private parties instead of for self-consumption, and resulted in state-owned utility CFE losing money.
AMLO, as the president is known, changed the Electricity Industry Law, and even tried to modify the Mexican Constitution to favor CFE and restrict private sector operations in the electricity market to only 46%.
Iberdrola was also fined more than $500 million in May 2022 for the illegal sale of energy in the self-supply modality.
The tension between the two parties ended on April 4 of this year when Iberdrola announced the sale of 13 combined cycle power plants and a wind farm to the Mexican government, through a financial vehicle to be managed by a company called Mexican Infrastructure Partners (MIP), for $6 billion.
