Legal suits mounting against Mexican renewable energy change-lobby

MEXICO CITY, Nov 22 (Reuters) - Legal suits are increasing against a rule change by the government of Mexican President Andres Manuel Lopez Obrador that has reduced private sector incentives to develop renewable energy, a leading business association said on Friday.

Last month, the government sparked complaints from businesses when it said it was altering a scheme promoting private sector renewable energy generation by allowing older state-owned hydroelectric energy plants to participate as well.

Mexico’s previous government created a market for bankable “clean energy certificates” (CELs) in order to foster green power generation, obliging companies to obtain a certain amount of electricity from such sources to meet national climate goals.

The scheme was tailored towards new private sector projects, but the government of Lopez Obrador, which wants a bigger state role in energy policy, argued it put national power utility the Federal Electricity Commission (CFE) at a disadvantage.

Companies have responded to the rule change by filing so-called “amparo” suits to overturn the decision and Julio Valle, deputy director of the Mexican Association of Wind Energy (AMDEE), said he expected the legal actions to cover well over 50% of new clean energy projects under development in Mexico.

“The amount of suits is going to continue rising,” he told Reuters, while declining to name the companies behind the legal actions. “From the figures we’ve seen, it could reach 80%.”

According to the government, the CFE accounted for nearly two-thirds of the gross clean energy output last year.

The row over the market for CELs follows on the heels of a separate dispute sparked by the CFE’s decision this summer to pursue the renegotiation of seven natural gas pipeline contracts awarded by the previous administration.

Valle said the CEL rule change ran contrary to Mexico’s stated ambitions to raise renewable energy generation under international climate accords such as the Paris Agreement, and effectively gave a “get out of jail free” card to the CFE.

Justifying its decision, the government said “speculation” in CLEs had led to an increase in electricity rates, an assessment that Valle said was incorrect.

AMDEE represents a range of companies including General Electric, Enel, Abengoa, Engie, E.ON and IEnova. (Reporting by Dave Graham and Adriana Barrera; Editing by Daniel Wallis)