Mexico has published a call for bids for the country’s third electrical power auction aimed at attracting new investment in renewables.
The winners will sign long-term power purchase agreements (PPAs) for clean energy supply, the energy secretariat SENER and the state energy control centre CENACE said in a joint statement. Public and private companies and the state will take part, as in the previous two auctions, they added.
Unlike in last year’s auctions however, it will be possible to sell power to participants other than state-owned utility Comisión Federal de Electricidad (CFE). This will proceed through a clearing house, that will act as the counterpart in the contracts signed between the buyers and the winning sellers, the statement said.
SENER will publish an operational handbook, which is currently undergoing a process of public consultation organised by state regulators, about how the clearing house will function.
More information about the auction is due to be published this week, including the characteristics of the bid round and the contract models.
It is not yet clear whether the upcoming auction will take into account the differing costs of electricity generation across the country, as with the second auction.
Bids submitted to CFE will be published on July 31, while those made to other participants will follow on August 14. Technical bids will follow in September. The results of the auction are scheduled to be announced at the end of November, the statement added, and projects must commence generating by January 2020.
Following the early stages of energy market reform, Mexico’s first auction saw a total of 1,720 MW of capacity awarded. Seven major wind and solar firms won 15-year contracts for large-scale projects, including SunPower Systems Mexico, Enel Green Power and JinkoSolar.
The second power auction resulted in a further 8.9 TWh of renewable supply contracts awarded, of which 4.8 TWh were for solar and 3.9 TWh for wind power projects.
The country is ramping up efforts to attract investment in renewables to meet its government-level targets, diversifying its energy mix as well as reducing its reliance on fossil fuels.
By 2024, the country intends to source 35% of electricity generation from renewables. Under its Energy Transition Law, by 2050, half of all electricity generated in the Latin American nation will have to come from renewables.