Mexico’s wind power industry held a big victory on Thursday after a federal court reversed a decision on a change in the renewable credit rule that critics have been detrimental to the sector.
After wind energy companies, including the US AES and Italian Enel, filed precautionary measures in courts throughout Mexico, a federal judge in Mexico City on Thursday reversed a lower court decision on changing the rule, according to people familiar with the case, who asked not to be identified because the information is not public.
The companies are fighting a decision by the Ministry of Energy (SE) to grant credits for old renewable energy projects administered by the Government, which were controlled by the development of new wind and solar parks. The credits are sold to large electricity users that the federal administration requires certain amounts of renewable energy.
Critics of the rule change fear that they grant loans to older projects, certificates known as Clean Energy Certificates (CELs), reduce their value and will undermine investment in clean energy.
While the decision of the appeals court technically only guarantees the value of the credits for the company requesting the initial court order, the lower courts are likely to follow suit. If more court orders are made in the lower courts, the changes are effectively detected throughout the country. There are at least 18 specified mandates that are currently pending, sources said.
The Court of Appeals of Mexico City could not be reached for comment and the SE did not immediately answer the questions.
The decision is a blow to the administration of President Andrés Manuel López Obrador, where the SE seeks to help the Federal Electricity Commission. But industry groups, including the Mexican Wind Energy Association and the Mexican Solar Energy Association, have argued that changing the policy that governs CELs undermines the initial calculation that led clean energy generators to invest in Mexico in the first place. .
While the SE may appeal the decision once again to the appeals court, it is likely that the case will continue for months while maintaining the suspension of the rule change.