Mexico’s electricity market: a year in numbers

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The Electricity Regulatory Commission (CRE) of Mexico awarded 463 permits for electricity generation in 2015. This represents a three-fold increase from the previous year. While not all of these permits are for greenfield projects and many are accounted for by the CFE, they are evidence that the energy reforms of 2013 are encouraging a renewal of the electricity infrastructure in Mexico. 

Source: CRE data and author's calcualtions

Source: CRE data and author’s calculations

 

Small scale renewables

It is clear that the reforms are encouraging small undertakings in renewable energy. Like the charts below shows, nearly 40% of the permits are for solar generation and over 50% of all new permits are for small producers and self-suppliers.

Source: CRE data and author's calcualtions

Source: CRE data and author’s calcualtions

Source: CRE data and author's calculations

Source: CRE data and author’s calculations

 

 

 

 

 

 

But in terms of the total capacity that is being permitted, fossil fuels continue to be dominant (60%) with natural gas taking the lead.

Source: CRE data and author's calcualtions

Source: CRE data and author’s calcualtions

 

Upgrades to existing installations

The total capacity that CRE authorized in 2015 adds up to a whopping 61,512 MW, which is roughly the size of Mexico’s existing electricity system. This should not be interpreted as a doubling of installed capacity since it includes permits for upgrading existing installations, which are listed at their full capacity. To get a sense of the amount of new generation being permitted, 200 of the 463 permits are slated to begin operation after January 2016, and these account for just over 16,000 MW.

Implementation of the energy overhaul in Mexico is taking some time. Not only have low oil prices depressed interest in bidding for Mexico’s oil fields, but the launch of the wholesale electricity market in January of this year was a complete non-event. Part of the reason is the market dominance of CFE. As explained in a previous post (http://www.energyfuturelatam.net/2016/02/05/tentative-start-of-mexicos-wholesale-electricity-market-insiders-advantage/) few firms have made moves to try to compete with CFE in the market. In terms of new permits, CFE accounts for 159 permits (34%), but of these only a handful are for new or newer installations: 5 pertain to plants that came into operation in 2015 and only 1 is for a plant slated  to come online in 2016.

 

For more detailed analysis contact the author at sgaylord70@gmail.com

 

 

 

 

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