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, ...

Social License to Operate: New Standards for Energy Investments

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The term “social license to operate” (SLO) is now part of the jargon used by politicians, business people, and NGOs to refer to the community buy-in that legitimizes infrastructure and development projects. Unlike its cousin “corporate social responsibility” (CSR), which is a self-defined, corporate-driven strategy, SLO can only be granted by the community, requires community engagement, and implies joint stewardship. SLO is an abstract concept; it is easier to measure its absence than prove its presence. Yet there are enough cases out there to ground our understanding of what SLO means in practice. To name a few, Innergex Renewable Energy, a ...

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.  (more…)

Social Impact Assessments: high standards for energy projects in Mexico

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Under the new rules of the energy reform, anyone seeking to develop an energy project in Mexico must submit a Social Impact Assessment (Evaluación de Impacto Social, EIS) for approval to the national energy agency, SENER.  The guidelines for the assessments are contained in the Hydrocarbon Law and the Electric Industry Law, passed by the Mexican Congress in August 2014, the corresponding Regulations, passed in October 2014, and Administrative Instructions published in April 2015. The content of these assessments varies somewhat for hydrocarbon and electricity projects. The laws mentioned above specify that SENER will conduct an initial study of social conditions and ...

A boost for renewables in Mexico

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The three members of the North American Free Trade Agreement (NAFTA) signed a deal last Friday, February 12, to cooperate on clean energy and address climate change. The goal of the memorandum of understanding is to integrate the energy systems of Canada, U.S., and Mexico and promote a clean energy agenda. Like many environmental agreements among nations, it will only prove effective if it supplements favorable domestic conditions. Here's some information on electricity trade and renewable energy (RE) within NAFTA,  and the prospects for more integration leading to cleaner energy. According to the Energy Information Agency, in the ten years between ...

Mexico’s wholesale electricity market: insider’s advantage

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Mexico’s new wholesale electricity market began operations on January 27 in Baja California, and on January 29 in the rest of the country, as established in the energy reform laws passed at the end of 2013. The wholesale electricity market, which is the cornerstone of the reform, was created to allow large consumers (capacity demand greater than 3 MW) to directly contract their electricity needs from qualified generators, and in so doing improve the price and quality of the electricity service. So far only one generating company, Grupo Fénix, has joined the ranks of authorized sellers along with CFE, the ...