Mexico City — Mexico’s state-owned power utility Federal Electricity Commission (CFE) is planning to offer electricity generated by its Puerto Peñasco solar power plant in Sonora state to Tesla for its Gigafactory in Nuevo León, in view of the elimination of the self-supply model in the country.
Mario Morales Vielmas, CFE’s director general of contract brokerage, told Bloomberg Línea that the proposal will depend on the energy requirement of the company led by Elon Musk.
“It is likely that they will approach the CFE,” Morales said, pointing out that end users can seek a number of different supply options with private companies, or with the state-owned utility
Tesla’s plants normally generate part of their energy with their own renewable resources, mainly solar energy, as is the case of its factory in Nevada. However, the self-supply model in Mexico was removed as part of the energy reform during the government of former president Enrique Peña Nieto in 2013, although the country honored the contracts signed until the end of that administration in 2018.
The self-supply model led to a legal battle between the government of President Andrés Manuel López Obrador (AMLO), the CFE and the private sector, amid a tsunami of appeals to keep the model in force, and which ended up in the Supreme Court.
CFE’s presence in Nuevo León was strengthened in 2022 after Spanish company Iberdrola, the larget private electricity generator operating in Mexico, tried to migrate a power plant registered under the self-supply model to the wholesale electricity market, but the Energy Regulatory Commission (CRE) denied its request.
As a result, CFE took over Iberdrola’s industrial customers in Monterrey, capital of Nuevo León, and where the new Tesla plant will be located.
Although the governor of Nuevo Leon, Samuel Garcia, told Bloomberg News that Elon Musk’s company will invest $10 billion in different phases, Tesla has not yet publicly defined the specific investment amount for the construction of the plant that it seeks to complete in record time.
Neither has it revealed the proposed vehicle-production rate, nor the model of electric vehicles to be built, or the amount of water or energy required for its new facilities located in the municipality of Santa Catarina.
CFE inaugurated the first phase of the Puerto Peñasco solar plant in mid-February, and which it claims is the largest solar plant in Latin America, with an initial generation capacity of 120MW, and 12MW of battery storage.
President Andres Manuel Lopez Obrador, tried to redirect Tesla’s arrival to central or southern Mexico due to the lack of water in the north of the country, but, according to Garcia, Tesla’s suppliers are already installed in the state, and even have an exclusive lane for Tesla on the state’s border with the US
Musk’s recent investor day at Tesla disappointed investors and analysts due to the lack of details about the new generation models, such as those it plans to manufacture in Nuevo León.