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 35% by 2024. Here’s how CELs work in Mexico.

  1. 1 CEL = 1 MWh of energy or fraction thereof when generators also use fossil fuels.
  2. The regulatory agency CRE grants CELs to clean power generators.
  3. The number of CELS is determined by CRE during the first 10 days of each month, based on the energy production of the preceding month.
  4. CRE will also determine the number of CELs to issue based on long-term projections of energy and capacity demand.
  5. CELs are proof of meeting clean energy targets. They are turned in at the end of the year.
  6. A market for CELs will begin operating in 2018 and any person can operate in it.
  7. Each CEL can only be used once; after it is used to prove a target has been met, it is retired and no longer has commercial value.
  8. CELs can be banked and expire after 5 years.
  9. CELs can be voided via request to CRE.
  10. Compliance with the targets can be deferred for a maximum of 25% of the CELs owed, which incurs a penalty of 5% per year of deferment.
  11. CRE will assess penalties to those who do not produce the necessary CELs to meet targets.

CFE plans to purchase 6 million CELs per year to meet the initial 5% clean energy target. In the first auction that just took place, CFE purchased 5.4 million CELs, one per every MWh of energy it bought.

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