• DILEMMA: The López Obrador Administration’s decision to suspend long term clean energy auctions early this year will imply much higher costs for Mexico’s state-owned electric utility (CFE) affecting its own financial position by relying on its own much costlier power generation plants.
• BREAK: Back in February, the Mexican National Center for Energy Control (CENACE) cancelled the fourth long-term energy auction that could have brought electricity prices even lower than USD 17.7 per MWh; instead, CFE’s electricity production prices are higher than USD 30 per MWh.
• TWO OPTIONS: “Given that 90 percent of basic users receive a subsidies there could be two effects: either they increase [electric] rates or increase the budget allocated to subsidies and decrease it in other important items”, said Víctor Ramírez, expert in Mexico’s clean energy market.
• SOLAR & WIND: Back in November 2017 and after the third long term electric auction, the Mexican Government estimated that after the completion of all projects within the original three tenders, Mexico’s power generation capacity coming from solar and wind would be 11% of total.
