Auctions of wind power canceled until 2021 in Mexico

The president of the Mexican Association of Wind Energy (AMDEE), Leopoldo Rodríguez Olivé, said during 2019 that 1,800 megawatts of wind turbines will be added to the national generation park, to reach more than 6,800 megawatts in 13 wind farm entities in the country, making Mexico is the second largest wind producer in Latin America after Brazil.

Even without auctions and only through bilateral contracts and distributed generation, the potential of the country will allow investments of 14,000 million dollars to reach an installed wind power capacity of more than 10,000 megawatts in 18 entities at the end of this administration.
Rocío Nahle, has explained to businessmen of the branch that the development of renewable plants in the country is the best example of efficient coexistence between the public sector and the private sector

The auctions for energy acquisition by the Federal Electricity Commission (CFE), mainly, were canceled both in its long-term modality to encourage the placement of renewable plants and to obtain better generation rates through combined cycles in the medium term . However, they will be reactivated in 2021, as the new administration will wait for the completion of the implementation of the 56 projects committed in the three previous auctions, while the electric company executes a comprehensive transmission project and is strengthened to compete in the market.

The holder of Energy, Rocío Nahle, has explained to businessmen of the branch that the development of this technology in the country is the best example of efficient coexistence between the public sector and the private sector, for what the government intends to give continuity, but of Equitable and balanced way, without weakening the productive enterprise of the state.

For the time being, until February of this year 10 of the 56 new parks committed in the auctions of 2015, 2016 and 2017 have been put into operation. Of these, six correspond to the first contest and four to the second, while 11 projects more than the first auction and 15 of the second are under construction.

In addition, there are still four wind farms and photovoltaic parks to start construction of the second auction, while the third contest all projects are to start works, but have a deadline to start 2020. Until then, the Ministry of Energy It will evaluate if these leveraging mechanisms for renewable works are adequate to seek the growth of the national electricity generation basket.

In terms of the investment committed by the winning companies of the auctions, which totals 10,000 million dollars, the advance is 19%, while in terms of installed capacity in these new parks, where 7,666 megawatts were committed, mainly wind and photovoltaic, has started the operation of 21% of the committed.

The generation from only renewable sources, solar and wind mainly, is able to fully provide the growth of electricity demand for the next 15 years, about 2.6 gigawatts installed additional to the year at an incremental rate of 3.5 percent. This would cost half of the disbursement in new fossil fuel plants and would allow the country to meet the energy transition goals by reducing exposure to climate change risks, explained Daniel Chacón, spokesperson for the Mexico, Climate and Energy platform of the Initiative. Climate of Mexico.

However, for this purpose, a new management is required to convince the new administration, which intends to increase coal generation and reconfigure gas-fired plants for a new generation, the analyst said.

For this increase in demand, about 40 gas combined cycle plants (the cheapest fossil technology) are required, which would cost around 3,000 million dollars a year, when the leveled cost of renewables, of around 20 dollars per megawatt hour, would lead to an outlay of maximum 1,500 million dollars per year, thanks to the drop in costs that has been reached.