Mexico is one of the hottest global renewable energy markets and is currently the second largest power market in Latin America with US$110 billion of investment in the generation, transmission and distribution sectors forecast until 2030. Mexico lies completely in the sun belt, with double the radiation of Germany, yet had had negligible solar deployments and is set to grow to a 1GW solar market within 4 years.
Only five years ago, the generation, transmission, distribution and supply of electricity were all exclusively managed by the state-owned utility (and monopoly), the Comisión Federal de Electricidad (CFE). The energy sector attracted little foreign investment and had only a few operational renewable energy projects. All that changed in 2014, when, as part of a package of reforms, the government passed the Electricity Industry Law (Ley de la Industria Eléctrica) and started the process of a profound transformation of the power market - from a vertically integrated utility controlled sector - to a liberalised generation market with more opportunities for private companies. Clean energy has been an integral part of the power reform from the onset.
Decarbonisation objectives have been integrated into the design of the electricity market reform itself in the form of quota obligations for clean energy certificates (CELs), a market design that informs investors about the value of investments in new clean energy investment by time and location. (IEA:2017) In 2018, the minimum level of consumption from emission-free technologies which needs to be proved via CELs is set at 5% for all large consumers, including CFE. This will increase to 5.8% in 2019, 7.4% in 2020, 10.9% in 2021 and 13.9% in 2022 as Mexico chases after an aggressive mandate to generate 35% of its power from clean sources by 2024.
To learn more about the Mexican clean energy market, please download the report below that has been developed as a key piece of analysis for MIREC WEEK (Mexico's Annual Clean Energy Congress & Exhibition, now in it's 8th year). This report will give you an overview of the ongoing energy reform and the power sector transformation in Mexico – in retrospective and in perspective up until 2030. We will analyse in detail the results from energy auctions so far, the new auction design and the role of the clearing house that made its debut in the November 2017 auction. Key grid upgrades and energy storage development come next. Last but not least the report will offer some insights on finance and key market participants.
Download a Free Indepth Report on the Mexican Clean Energy Market