Spain’s Iberdrola scraps $1.2bn power project

Bloomberg

Spain’s Iberdrola SA is canceling a project in Mexico to build a $1.2 billion combined-cycle plant because it can’t secure a supply of natural gas, according to Mexican officials.
The mayor of Tuxpan, Juan Antonio Aguilar, said in an interview that representatives of Iberdrola told him that it’s scrapping the project in his city because in nine months it hasn’t been able to reach a supply agreement with the state utility, known as CFE.
Cuitlahuac Garcia, the governor of Veracruz, tweeted that the Energy Ministry told him the project will be left in the hands of the CFE. Tuxpan is located in Veracruz state.
This would be the first major investment cancellation in the electricity sector since the administration of President Andres Manuel Lopez Obrador announced new measures to limit private renewable energy production and prioritise the state utility.
It wasn’t clear whether the lack of a deal with the utility had to do with the government’s position on private generation, or if it was related to Lopez Obrador’s recent public criticism of the company.
Iberdrola declined to comment on the matter and the public utility, known as CFE, as well as the Energy Ministry, didn’t immediately respond to a request for comment.
“The company received orders from corporate headquarters in Spain to leave,” Aguilar said by phone from Tuxpan. “They had everything ready and were just waiting on the gas contract to get started.”