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    CFE increases generation costs by 23%.


    November 16, 2021 - CE Noticias Financieras

     

      MEXICO CITY - So far in the current administration, the generation costs of the Federal Electricity Commission (CFE) have increased 23 percent on average.

      In January 2019, the average cost of CFE power plants per megawatt-hour was 1,508 pesos, but last September it reached 1,852 pesos, according to an analysis of the calculation reports of the Energy Regulatory Commission (CRE).

      If costs are reviewed by technology, combined cycle plants, which are plants that use natural gas, have registered an increase of 28 percent.

      In thermal power plants, among which are the coal-fired, thermoelectric, internal combustion and turbogas, the cost increased 32 percent.

      Even hydroelectric plants, which the government intends to favor with its electricity reform, have registered an increase of 35 percent.

      Montserrat Ramiro, former commissioner of the CRE, said it has impacted the rise of fuels worldwide, but also warned that the CFE has turned on less efficient plants.

      He explained that when it costs more to generate electricity there are two options to pay for it: via subsidy or charge it to consumers, so it will always end up hitting citizens and businesses, and will affect the price of products and services.

      "If the government pays for it through subsidies," Ramiro said, "it's citizens' taxes, and if consumers pay for it, it makes the country's economic activity more expensive, so they pay for it out of your pocket.

      EXPENSIVE SPARK

      Generating electricity has become more expensive so far this six-year term and the increase depends on the type of technology used.

      (Average cost per megawatt-hr, in pesos)

      JAN.2019 SEP. 2021%

      Average CFE plants $1,508 $1,852 23% Average CFE plants $1,508 $1,852 23% Combined cycles

      Combined Cycle $1,592 $2,029 28% Thermal* $1,675 $2,205 32% Thermal* $1,675 $2,205 32% Thermal

      Thermal* $1,675 $2,205 32% Hydroelectric* $1,675 $2,205 32% Hydroelectric* $1,675 $2,205 32% Hydroelectric

      Hydroelectric plants $899 $1,211 35% Hydroelectric plants $899 $1,211 35% Hydroelectric plants $899 $1,211 35% Hydroelectric plants

      *Carboelectric, thermoelectric, internal combustion and turbogenerators

      Source: CRE calculation reports

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