On December 24, 2015, the new Energy Transition Law (the "Law") was published in the Federal Official Gazette, becoming effective on December 25, 2015.
This Law abrogates the Law for the use of Renewable Energies and for the Financing of Energy Transition, as well as the Law for the Sustainable Use of Energy, which since 2008 were the main regulatory instruments for renewable energy sources and sustainable energy in Mexico.
The main purpose of the Law is to regulate the sustainable use of energy, as well as the obligations regarding clean energies and reduction of pollutants by the Mexican power industry, complementing the provisions of the Power Industry Law and its Regulations that are in force since 2014.
The Law also makes reference to the promotion of clean energy mechanisms, actions to reduce the generation of pollutant emissions and the creation of programs for the energy transition and the sustainable use of energy.
The Ministry of Energy ("SENER"), the Ministry of Environment and Natural Resources, the Energy Regulatory Commission and the National Commission for the Efficient Use of Energy will be the authorities in charge of applying the Law.
As a result of this Law, SENER will establish goals for the generation of power using clean energies:
- 25% by 2018;
- 30% by 2021; and
- 35% by 2024.
Another important aspect is the conversion of the current Institute of Power Investigations, created since 1975, to the National Institute of Power and Clean Energies, whose authority will be extended and adjusted to the new Mexican power industry. This conversion will occur within the following six months.
Also, the transitory regime of the Law provides that its regulations and other regulatory provisions shall be issued no later than 260 business days from the date in which the Law entered in force. Considering the above, it is estimated that the corresponding regulations of the Law shall be published by next December 2016.
With the publication of this Law, the investment on the Mexican power sector is boosted and the development of the new regulations that will be attended by parties of the Mexican power industry continues, as part of the 2013 energy reform.
Our firm will keep you informed in connection with the development of this matter.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.