Project Finance Blog

Mexico announces bidding rules for third renewable energy projects auction

Posted in Blog article

The Mexican government announced a new round of auctions that will take place later this year for renewable energy projects. The new round will differ from the first two rounds by allowing offtakers beyond Mexico's Federal Electricity Commission (CFE) to participate.  The first auction's average price was $41.80 per MWh and the second auction's average price was $33 per MWh. Many are expecting prices for the third auction to be in a similar $30-$40 per MWh range. 
Following the second round of auctions that ended in September 2016, the Mexican government hopes that this new round will help the country move closer to its aim of having 35% of electricity production coming from renewables by 2024 and 50% coming from renewables by 2050. All types of clean energy technologies may bid in the auction to provide capacity, clean energy certificates (CELs) and contracted power.
The auction will be managed by the National Energy Control System (CENACE). In addition to overseeing the auction, CENACE will administer the various contracts that result from the auction, as it continues to serve as a clearinghouse for Mexico's new wholesale power market.
The initial version of the bidding rules are published on CENACE's website. Bids submitted to CFE will be published on July 31, 2017 and bids submitted to other offtakers will be published on August 14, 2017.  Decisions will be made by November 22, 2017 so that all projects can plan to achieve COD before January 1, 2020.
More information and sources for this post can be found on CENACE's website as well as here (subscription required) and here.


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