(Adds quotes, background on dispute over renewable projects)

By David Alire Garcia

MEXICO CITY, May 22 (Reuters) – Private renewable energy
firms in Mexico should pay for part of the baseload power
underpinning the flow of electricity on the grid, the head of
the state power company said on Friday, as a dispute on the
future of the local industry roils the market.

Manuel Bartlett, director of the Comision Federal de
Electricidad, or CFE, told Reuters that his company nevertheless
favors more clean energy and will seek to further reduce its use
of fuel oil as a major source of power generation.

“Wind and photovoltaic (plants) don’t pay the CFE for the
backup,” Bartlett said in an interview, referring to the cost of
power generation from fossil fuels to ensure a uninterrupted
flow to the grid. “And I can’t allow that.”

Last month, Mexico’s power grid regulator CENACE issued a
ruling supported by Bartlett that prevented several dozen new
renewable energy plants from connecting to the network.

CENACE cited the national crisis over the coronavirus
pandemic as a justification, arguing that the intermittent
nature of wind and solar power is not consistent with ensuring
constant electricity supply.

The decision prompted letters of complaint to the energy
ministry by the European Union and Canada, whose governments
were upset that their companies had been shut out.

Mexican business associations also criticized the move,
saying it puts more than $6 billion in renewable power plants
scheduled to begin operating this year or next in limbo.

In a provisional ruling this week, a judge ordered CENACE to
back down and allow the renewable firms to continue with tests
needed to bring plants online.
(Reporting by David Alire Garcia; Additional reporting by
Adriana Barrera
Editing by Marguerita Choy and Sonya Hepinstall)