May 19, 2020 / 6:27 PM / 13 days ago

Mexican court provisionally suspends renewable energy plant freeze order

MEXICO CITY (Reuters) - A Mexican judge has provisionally suspended an official order that froze the opening of new renewable power plants and sparked complaints from some of Mexico’s main allies, including the European Union, judicial sources said on Tuesday.

In a decision dated May 18 and seen by Reuters, the judge said the April 29 order by market regulator CENACE risked distorting free competition to the detriment of the consumer, and Mexico’s commitments to promote a clean environment.

CENACE suspended the plants, arguing that the intermittency of wind and solar power threatened the reliability of the national power supply during the coronavirus crisis.

However, after several suits were filed to contest that suspension, the judge found that the risks cited by CENACE were less serious than the implications of undermining competition and jeopardizing Mexico’s transition towards clean energy.

On Friday, both Canada and the European Union wrote letters to the government complaining about the CENACE’s move, asking for an audience with Energy Minister Rocio Nahle. Nahle said on Monday she would respond to their concerns this week.

Late on Friday, her ministry published an order that gives the government more scope to control the process of approving new renewable energy projects, further angering those who feel the administration is squeezing out private companies.

President Andres Manuel Lopez Obrador, a leftist who is intent on giving the state a bigger role in the energy sector, on Monday rejected criticism of the government’s agenda.

He said he wanted to level the playing field in a sector that for too long had been beholden to private interests.

Asked for comment by Reuters, Mexico’s Federal Economic Competition Commission (Cofece) said it was studying the orders issued by CENACE and the energy ministry, and would make a determination on them if it decided to open an investigation.

Reporting by Dave Graham and Adriana Barrera; Editing by Bill Berkrot

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