Re-Wiring the CFE

By Enrique Caldera/ Translation Lydia Carey

During the recent rapid advance in technology we have watched with wonder as those on the cutting edge of communications and business have created leaner, meaner, and more accessible products and services. From smart cars, to Wi-Fi, to twitter, the world is becoming increasingly and instantaneously connected and our demand for mobility and efficiency has grown exponentially. Even the old leviathans of government and public services are being forced to self-evaluate the way customers and citizens interact with them. Our national electric utility is one of these dinosaurs. As we move towards diversified energy production, which has become a necessity in order to mitigate climate change, this behemoth and antiquated system will need to face the reality that its current structure is unable to serve the needs of its consumers and the environment.

The fundamental problem with the electric utilities is that they are natural monopolies. Conventionally the industry has grown within a vertical structure with four main components: generation, transmission, distribution, and marketing. This is a huge system composed of large interconnected power plants, lines of transmission that carry the energy from the main centers of production to the largest centers of consumption (El Valle de Mexico and the cities that surround it, Puebla, Pachuca, Toluca, and Cuernavaca, and the suburban areas that consume 25% of the national production) and an extensive and complicated network of distribution that extends outward to connect each user and deliver service.

This conventional structure and functionality of the electricity utility is already irrelevant due to several technical- economic reasons. In response to anticipated demand their solution is to build gigantic power plants, each one larger than the last whose construction time and monetary requirements, in countries on the road to development, have surpassed the financing capacity of even the International Bank of Development. This is coupled with the requirements of new or improved transmission lines and the extension of the networks of distribution, continually expanding geographically. Also, electricity must be produced at the moment of demand, so plants built in response to peak hours of consumption, in the summer months in the north, winter in central Mexico, mid-day or evening hours, etc, have a huge idle capacity the rest of the time. An important facet along with this, is the availability of energy resources (fossil fuels, etc) that can be converted into electrical energy. Mexico and the Mexican electric utility have been devastatingly slow in utilizing the enormous potential we have in the renewable resources of solar and wind. All this makes for an obsolete electrical system.

Modern electric utilities will be structured on two basic premises: to protect the environment for future generations and to promote sustainable social relationships. This requires creating an interconnected system between producers and consumers where the electric utility opens their natural monopoly to include some new players. It is within this new type of system that renewable energy such as solar and wind energy, will reach their true capacity and we will see the democratization of power generation as each rooftop to becomes a small photovoltaic plant and every hill or canyon where wind speeds through or boxes, a small wind-electric plant.

The transition that is required is a wider opening of the grid for outside producers. The money needed for investments in this new type of power network will not be provided exclusively by large foreign investors, but also by countless small and local investments in cogeneration, self-sufficiency, PV homes and buildings, and small-scale production using local and renewable energy resources. Creating a system that serves both consumers and producers; one that will utilize renewable energy and local power generation to safeguard the environment for future generations and bring the electric utilities into the 21^st Century.