Mexico’s president nixes oil auctions, plans to review green energy subsidies

MEXICO CITY (Bloomberg) - Mexican President Andres Manuel Lopez Obrador said authorities will review some government wind and solar contracts to determine if private companies are improperly subsidized.

“People were deceived for a long time by being told that subsidies for electric power were for consumers -- but no,” Lopez Obrador said Wednesday during his daily press conference. “The biggest subsidy is for private companies.”

The move is the latest blow to Mexico’s budding private renewable energy market. The president, a fiery nationalist known as AMLO, has sidelined efforts by his predecessor to open Mexico’s energy sector to private investment and instead has pushed to consolidate power in the hands of state-owned energy companies Petroleos Mexicanos and the Federal Electricity Commission, or CFE.

Last month, Bloomberg reported CFE was proposing to cancel some clean-energy contracts and eliminate discounts on transmission costs for power generators to use its network.

During Wednesday’s briefing, Lopez Obrador said his government had no plans to revive oil-field auctions for private companies, dismissing a local media report. He said officials would announce a plan by mid-February that would make clear how private companies could participate in the nation’s energy sector.