Introduction

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This TUED working paper examines the Mexican government’s plans for its energy transition, focusing on the electricity sector.

The plans indicate that Mexico is attempting to pursue a transition that is state-led, with an expanded role for the country’s public power utility (Comisión Federal de Electricidad, or CFE) inpower generation and a reduced role for private companies.

This contrasts sharply with the policy direction established under the neoliberal administration of Enrique Peña Nieto (2012-2018),a policy that seriously constrained the CFE and led to private multinationals dominating the country’s power generation system.

The government’s plans therefore carry considerable importance for trade union policy discussions on energy and climate change. They are broadly consistent with what a growing number ofunions at the global level understand to be a public pathway (camino público) approach in thatconfronts head on the neoliberal view that reaching climate and renewable energy targets is contingent upon the need to attract private investment on terms dictated by the investors. The Plan does carve out a role for the private sector; however, Sheinbaum and the Energy Secretary (Secretaría de Energía, SENER) envisage its role to be subordinate to that of the state. Energy projectsinvolving private interests must be compatible with the government’s plans for the sector, andthe state must have a majority stake in any project approved by SENER.

This paper also identifies some of the political and economic challenges that may confront theMexican government’s efforts to achieve its goals for the sector. The data presented below (in some sections, at least) is unavoidably technical in nature, but hopefully this will not distract fromits main goal, which is to draw attention to the political significance of what the Mexican government is attempting to do.

Either way, unions and their allies who support a public pathway approach to energy transition have an important role to play in ensuring that Mexico’s break with neoliberal energy policy is notreversed or unduly compromised. As of this writing, both domestic and international businessinterests, who would like nothing more than to derail Sheinbaum’s energy transition policy, arepositioning themselves to achieve just that. For both the Mexican government and internationalcapital, the stakes are high, and so are the risks.

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