How Spanish companies take over the electricity sector in Mexico
Little by little, in a sustained and silent way in the recent decade, a group of Spanish multinationals has managed to control a good part of the production, supply and distribution of electricity in Mexico, both clean and renewable energy and those that use fossil fuels for the generation.
Iberdrola, for example, one of the best-positioned companies, hopes that in 2020 its Mexican subsidiary will exceed the annual production of kilowatts to the parent company in Spain, which will allow it to control 20 percent of the Mexican market. The reform approved by the previous government of Enrique Peña Nieto, which entered into force in 2014, opened the doors to Iberian expansion in a strategic sector.
In recent decades, especially since the partial opening of the sector to private investment - first as gas suppliers for combined cycle plants -, Spanish multinationals increased their interest in the Mexican market. In fact, in all the international forums, bilateral summits, both between Mexico and Spain and with the European Union, one of the most insistent claims to Mexican governments was precisely the urgency to fully liberalize the then most protected sectors of the Mexican economy. , hydrocarbons and electricity.
This was reported to former President Carlos Salinas de Gortari, Ernesto Zedillo, Vicente Fox, Felipe Calderón, and Enrique Peña Nieto. The pressure came not only from the executives of the main companies in the sector, such as Gas Natural, Endesa, Iberdrola, X-Elio, Sacyr, Acciona, Abengoa or Unión Fenosa, but also from other pressure groups, such as BBVA or Santander banks, and others from the financial sector, which in turn have shareholdings in energy companies.
The commitment of Spanish capital in the Mexican electricity sector has made it a foreign investor of reference and, therefore, in the main candidate to control the market in the future.
It is estimated that between 2006 and 2015 the Mexican electricity sector received direct foreign investment for just over $ 7,400 million, of which 38 percent came from Spanish companies.
Its investments have been deployed in all facets of the complex electricity sector in Mexico, both in the supply of gas to plants and in the generation of wind, geothermal, hydroelectric and nuclear energy, and have been positioned in the production, supply, distribution, and generation of technology focused on the area.
According to reports from the Foreign Trade Institute of Spain, between Naturgy (formerly Gas Natural Fenosa) and Iberdrola, they produce around 20 percent of Mexico's electricity.
Abengoa, Elecnor, and ACS have been awarded contracts by the Federal Electricity Commission (CFE) for the construction of plants (mainly combined cycle plants). In the wind sector, more than half of the energy is developed by Spanish companies (Iberdrola, Acciona, Gamesa, Renovalia, X-Elio).
Data from the Secretary of Energy (Sener) also confirm an upward trend in recent years: the increasing absorption of the business of generation, supply and distribution of electricity by private initiative, in which Spanish capital is the one that starts with a domain position.
For example, in 2017, 329 thousand 162 gigawatt-hour (GWh) of electricity were generated in Mexico, of which CFE plants produced 52 percent, while private ones 48 percent, according to the National Electricity Development Program. 2018-2032.
If you break down the section of the private sector, the so-called independent energy producers (whose electricity is sold to the CFE) contributed 26.7 percent of the total.
Iberdrola and Naturgy are the two Spanish multinationals with the greatest presence in the Mexican electricity sector, and already have a workforce in Mexico of more than a thousand workers each.
In fact, according to data from the Sener, in the period 2014-2017 Iberdrola led investments in Mexico with $ 1,832 million dollars, followed by Acciona Energía (878 million), Fisterra (650 million), Abengoa (631 million) and Naturgy (404 million).
Furthermore, Iberdrola designed an investment plan that remains in force after the change of government, in which it expects to spend a little more than $ 2.8 billion until 2022.
Even in its strategic plan warns that its eight projects currently under construction, which add more than 4 thousand megawatts, will add power of about 2 thousand megawatts, according to data presented a few days ago.
The objective is to raise its total generation capacity to 11 thousand megawatts in 2022, which will produce more than 20 percent of the electricity consumed in Mexico. In fact, in the previous year and a half the company started up two combined cycle plants in the states of Nuevo León and Baja California, and two cogeneration plants in Tamaulipas and Queretaro, which allowed it to increase its capacity by more than 10 percent and reach a record production in 2017 of 41 terawatt hours (TWh).
It is a booming business that allowed Iberdrola to reach a historical record of net profits, achieving in the first nine months of last year 2 thousand 91 million euros of profits.
The official data of the Sener confirm the expansion of Spanish capital in the sector in recent years. Between 2010 and 2015, 51 projects were carried out, of which 43 percent were detonated by Spanish companies, especially in the generation of renewable sources, in which Spain has reference companies on an international scale.
Naturgy also plans to expand its business in the sector in Mexico. One example is that in its recently approved restructuring of the group, one of the four legs of the conglomerate will be the so-called Iberoamérica Zona Norte, which only includes Mexico and Panama.
One of the corporate milestones of this corporate in Mexico was to obtain authorization for distribution permits for the states of Campeche and Yucatan, which will allow it to supply a market of 513 thousand new potential users, which could aspire to achieve 8 million potential customers if all their plants and consortiums in Mexico are taken into account.
One of the main allies of the Spanish corporations for their expansion in the sector in Mexico has been Guillermo Zúñiga Martínez, of the Energy Regulatory Commission, who in recent years has visited this country on several occasions to explain first hand the ins and outs of the energy reform, most of them at events promoted and organized with the support of the Mexican embassy, presided by the PRI diplomat Roberta Lajous, who was recently ratified in office.
The most recent visit of Zúñiga Martínez to Madrid was on December 12, when Andrés Manuel López Obrador had already taken office, to meet with executives of the sector and tell them that the acquired rights of the companies in recent years were to be guaranteed, and he predicted before them that there will be no major changes in the long-term auction that has paralyzed the government.