Seeking to boost the development of clean electricity south of our border, Mexico has conducted its first power auction, awarding 1,720 megawatts of wind and solar energy. This auction took place following the government’s end of the state electricity monopoly in 2013.
Mexico flag button shutterstock_128190698The Mexican government’s auction saw a total of seven wind and solar organizations winning electricity contracts and clean energy certificates. The outcome of the auction is expected to assist the government in meeting its long-range goal of producing 35% of its energy from clean sources by 2024.
The list of successful bidders was made up of leading international companies, including Enel Green Power, SunPower, Recurrent Energy, Alten Renewable Energy, and Gestamp Wind, PV-Tech has reported.
The auction represented the country’s inaugural private auction after Mexico’s state-owned energy sector was opened up to private-sector participation in a bid to encourage competition within the market.
Participation in the auction may have been higher than the Mexican government had anticipated: in total, 227 bids were made by 69 participants. The highest bid was made by UK-funded energy generation development platform Zuma Energía at 1.2 billion pesos (US$69/MWh). The 11 successful bundles of wind and solar projects and certificates were sold at an average price of US$41.80/MWh, with prices for solar specifically averaging at US$40.50/MWh.
Enel Green Power (EGP) was the largest winner, leaving the auction with 1GW of contracts. The Italian multinational renewable energy corporation has indicated it will invest $1 billion in the construction of three solar plants.
“Enel Green Power, acting through its subsidiary Enel Green Power México, has been awarded the right to sign contracts for 15-year energy supply and 20-year clean certificate supply with three PV solar projects for a total capacity of around 1 GW in Mexico in the country’s first long-term public tender since its energy reform. EGP has been awarded more capacity than any other operator taking part in the tender, confirming its position as the largest renewables operator in Mexico in terms of installed capacity and project portfolio.”
In a press announcement, EGP CEO Francesco Venturini said, “Mexico is a pivotal market for all serious players in this field due to its huge potential in clean energy and stable regulatory framework. The nearly 1 GW we have just been awarded, in addition to the capacity already in operation and under construction, have turned us into the main player in the country. We have worked hard to become one of the most competitive companies in many clean technologies and the positive outcome of this tender is another clear indication of the success of our growth strategy.”
The auction was an important step in the newly competitive Mexican energy market. Mexico has forecast as much as $62.5 billion in private investment in this sector by 2018.