MEXICO CITY - July 20, 2023 - Global law firm Greenberg Traurig’s Administrative and Tax Litigation Group in Mexico City obtained an injunction, halting the implementation of a new rule for calculating the efficiency of electric power generation systems. The new rule, issued by the Energy Regulatory Commission (CRE), impacts a broad segment of the country’s clean energy sector.
On May 26, the CRE issued a directive – Agreement number A/018/2023 – which changed the methodology for calculating electric power cogeneration system efficiency and the criteria used in determining efficient cogeneration. It also changed the criteria and procedure for determining the percentage of fuel-free energy efficiency that was established in previous resolutions (RES/003/2011, RES/206/2014, RES/291/2012 and RES/1838/2016). .For more information, see the GT Alert, Mexico Changes Methodology for Calculating Fuel-Free Energy in Electric Power Cogeneration Systems.
The new directive aims to reduce the efficiency rates cogeneration power plants must meet to be considered efficient, thereby reducing their clean energy output. It also includes combined cycle power plants within the catalog of technologies that can be considered to generate clean energy.
The new regulation impacts various areas of the clean energy sector in Mexico, including:
- Allowing combined cycle or cogeneration plants with lower efficiency rates to receive clean energy certificates, thus obtaining an additional economic benefit from these certificates, and thereby significantly increasing the number of certificates in the market which may reduce their value;
- Releasing certain parties from the obligation to acquire clean energy certificates;
Allowing Mexico to use electric production technologies that’s considered neither efficient nor clean by global environment exports in order for the country to meet clean energy targets set by national policies and international treaties.
Several industry experts and civil associations have filed lawsuits before the district courts to challenge the new directive, requesting that its implementation be halted until these lawsuits are resolved.
The Specialized Courts on Economic Competition, Broadcasting and Telecommunications, located in Mexico City and with jurisdiction throughout the country, granted the temporary injunction, and reinstated the previous rules for determining the efficiency of cogeneration systems and for calculating fuel-free energy.
With this injunction, entities in the energy sector now have judicial protection from the implementation of the new rule. While the Mexican government may challenge the temporary injunction, the current state of the clean energy market and its environmental protections remain in effect.
The Greenberg Traurig team involved in this matter includes Joselino Morales (Shareholder, Mexico, Administrative and Tax Litigation), Pedro Resendez Bocanegra (Counsel, Energy and Natural Resources), Hugo Hernández (Associate, Mexico, Administrative and Tax Litigation), Miguel Saiz (Associate, Mexico, Administrative and Tax Litigation), and Perla Salgado (Associate, Mexico, Administrative and Tax Litigation).
About Greenberg Traurig’s Energy & Natural Resources Practice: Greenberg Traurig’s Energy & Natural Resources Practice has broad transactional, regulatory, and litigation experience across the energy industry, including oil and gas, LNG, electricity, coal, wind, solar and other renewable energy sources, and water. The firm’s exceptional multi-office platform, including key offices in major energy centers, enables us to serve and implement legal strategies for energy clients throughout the U.S. and internationally.
About Greenberg Traurig: Greenberg Traurig, LLP has more than 2650 attorneys in 45 locations in the United States, Europe and the Middle East, Latin America, and Asia. The firm is a 2022 BTI “Highly Recommended Law Firm” for superior client service and is consistently among the top firms on the Am Law Global 100 and NLJ 500. Greenberg Traurig is Mansfield Rule 5.0 Certified Plus by The Diversity Lab. The firm is recognized for powering its U.S. offices with 100% renewable energy as certified by the Center for Resource Solutions Green-e® Energy program and is a member of the U.S. EPA’s Green Power Partnership Program. The firm is known for its philanthropic giving, innovation, diversity, and pro bono. Web: www.gtlaw.com.