Argentina: first call for new power

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After much talk about attracting investment, Argentina's government has set a date for its first electricity auction. The call for bids is aimed at covering electricity use during peak demand, in particular during summer months, and seeks to attract between 400 and 1,000 MW of combined-cycle thermal power. While the full technical specs will be not be available until May 9th, the Ministry of Energy has advanced the following details. Bids will be in dollars and will be targeted to specific periods, such as the summer 2016/17, winter 2017, etc. Winners will be signing contracts for 5 to 10 years with Cammesa, the wholesale agent, ...

Why can’t Pemex compete?

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Last week Pemex received a financial bailout of $4.2 billion from the Mexican treasury. These revenues provide only a temporary reprieve and fall far short of solving the company's financial problems, which are vast. Yet Pemex has one of the lowest production costs: 7 USD/barrel in 80% of its fields, 16.54 in the Chicontepec blocks, and under 10 in shallow waters. Mexico's costs are well below those of Brazil (49), Canada (41), and the U.S. (36) and comparable to those of Saudi Arabia and Iraq (10). So why are we constantly hearing that Pemex needs to become more competitive? And why does ...

Clean Energy Certificates for sale in Mexico

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The certificates, known by the acronym CEL (Certificado de Energía Limpia), are central to Mexico's strategy to encourage renewable energy generation. Similar instruments have been created in other energy markets to help generators and large consumer meet renewable energy targets in a cost-effective way through third party development of renewable sources. The sale of the first CELs took place with the long-term energy auction that ended on March 30, though the market to commercialize CELs will not begin to operate until 2018 when generators and large users are due to start meeting renewable energy targets. Targets have been set at 5% for 2018 and ...

Mexico: renewables at auction

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On March 30th, Mexico completed its first long-term renewable energy auction. In doing so, Mexico came through with the promise to pursue a cleaner energy matrix and cheaper prices for energy. This round of bidding included only one buyer, the public utility CFE, which continues to dominate Mexico's electricity sector (see previous posts on launching of wholesale market and permits), but regulators are hopeful that future bids will include other large consumers. This post provides information on the outcome of the auction. The next post will explain the use of Clean Energy Certificates in promoting long-term investment in clean energy. The auction At the end of the day, ...