Mexico to buy 2 million tons of coal for power plants

MEXICO CITY (AP) — Mexico’s state-owned electrical power company announced Tuesday it will buy 2 million metric tons of coal from Mexican producers to burn in power plants.

The announcement came as many countries are moving to reduce their use of coal-fired power plants amid declines in electricity demand due to the coronavirus pandemic.

But the administration of President Andrés Manuel Lopez Obrador has shown a deep devotion to fossil fuels, and hostility to renewables. In May, the government announced rules making it harder to bring solar and wind power projects online.

Under Tuesday’s announcement, the Federal Electricity Commission — known as the CFE — will buy the coal between July and December 2021, to help the economy of coal producers in the northern border state of Coahuila.

The commission said in a statement that coal-fired plants provide only 9.46% of Mexico’s electricity, “which puts the lie to press reports that the CFE is betting on dirty sources of energy.” Much of the fuel will apparently be used at back-up plants to meet peak demand.

In May, the federal government cited the coronavirus pandemic as a justification for new rules that will reduce the role of renewable energies like solar and wind power, granting a reprieve to the government’s own aging, oil-fired power plants.

Those role changes have been held up by court challenges, but would affect the ability of Mexican and foreign investors who had been allowed to sell their power into the government-operated grid. Industry associations said it will affect 28 solar and wind projects that were ready to go online, and 16 more under construction, with a total of $6.4 billion in investments, much of it from foreign firms.