Keywords: Energy Reform, Electricity Sector, Clean Energy
Because of the Energy Reform, the first two power auctions opened the Mexican Electricity Sector to participation by private businesses as generators. And now, with the third power auction going on, the Federal Electricity Commission (CFE) will no longer be the only entity able to acquire electricity generated by private groups, and private companies will now also be buyers.
To develop the electricity system, Mexico will need to invest U.S.$131.6 billion over the next 15 years. For now, thanks to the opening of generation and to power auctions, more than 30 businesses in 12 countries, including Mexico, will invest a total of approximately U.S.$6.6 billion between this year and 2021, noted Dr. César Emiliano Hernández Ochoa, the undersecretary of Electricity at the Ministry of Energy (SENER).
These conditions are an incentive for competition and more investment in clean energy in the country, said Dr. César Emiliano Hernández Ochoa, the undersecretary of Electricity at the Ministry of Energy (SENER), at the “Business Opportunities in the New Mexican Electricity Sector” lecture, on May 25, at EGADE Business School, Monterrey.
Invited by the EGADE Business School Graduate Degree Certificate in Energy Management, Dr. Hernández Ochoa explained that long-term power auctions are one of the most-important aspects of the New Wholesale Electricity Market (MEM, in Spanish), where generators are to compete on equal ground to sell electricity at a lower cost, and distributors and large users can choose their supplier.
“With the Energy Reform, Mexico introduced a wholesale market with retail competition, and the Mexican industrial organization in the electricity sector is moving toward the Organisation for Economic Co-operation and Development (OECD) standard,” noted this federal employee, who has also been the Chief of the Legal Affairs Unit at the SENER, the Secretary of the Mexican Petroleum (PEMEX) Board of Directors, and the Secretary of the Governing Board of the CFE.
Dr. Hernández Ochoa added that, thanks to the first two long-term power auctions for energy, power, and clean-energy certificates, 34 businesses in 12 countries, including Mexico, will invest a total of approximately U.S.$6.6 billion in generation projects to be developed in 15 Mexican states between this year and 2021, and almost 5 thousand megawatts of new capacity will be added.
Regarding the third power auction, the bases of which were presented on May 8, he noted that the sale of electricity generated by private groups will be open for the first time to buyers other than the CFE.
“Expectations for the third auction are that there will be several sellers, including some new ones, competitive prices based on international levels and trends, and investment in different areas of the country. One of the new additions is the creation of the Compensation Chamber, which will manage the bilateral contracts between private groups, and the participation of buyers other than the supplier of basic services, which is the CFE,” he explained.
Mexico has also adopted the best global practices in clean energy, according to Dr. Hernández Ochoa. “The clean energy portfolio standard in Mexico will be 35% in 2024, one of the most ambitious in the world,” he added.
Before the lecture by Dr. Hernández Ochoa, Dr. Osmar Zavaleta Vázquez, the national director of the EGADE Business School Energy Management Programs, introduced the Graduate Degree Certificate in Energy Management, a one year program created to train professionals able to respond to the needs, challenges, and opportunities in the renewed Mexican Energy Sector.
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