Mexico suspends ongoing clean energy tender

MEXICO: The new government has suspended an ongoing clean energy auction without saying when results will be announced or when contracts may be awarded.

Results of Mexico's fourth clean energy auction were due to be announced on 18 December (pic credit: Vestas)

Mexico’s grid operator and regulator Cenace (the National Energy Control Centre) stated the suspension would allow president Andrés Manuel López Obrador’s new administration to review the tender mechanism’s scope and objectives.

However, Cenace, which is responsible for carrying out tenders, did not state when the tender would now be held — only that it would notify relevant parties of the new date following a review.

The suspension comes just days after López Obrador, popularly known as AMLO, was sworn in on 1 December following an election victory in July.

Results of the tender were initially due to be announced on 2 November, but this was pushed back to 18 December to provide greater visibility, Cenace stated.

Meanwhile, contracts were due to be signed in mid-February 2019.

EDF, Engie, Enel, Invenergy, Iberdrola, and Neoen were among the developers pre-qualified to compete in the tender.

Wind and solar PV have dominated Mexico’s three previous clean energy tenders in 2015, 2016 and 2017, Cenace stated. 

Wind projects accounted for nearly 45% of all capacity awarded in Mexico’s last auction in November 2017, with an average price of $20.57/MWh — more than 38% lower than the $33.47/MWh average bid in September 2016.

Solar PV projects won the 55% remaining capacity in the November 2017 round.

The regulator announced a fourth auction in March 2018, with developers due to compete for long-term power purchase agreements (PPAs) with terms ranging between 15 and 20 years.

Since then, López Obrador’s left-wing National Regeneration Movement party (Morena) won an election in July, and now heads up a coalition government.

López Obrador’s has vowed a radical new Mexico and, following three decades of privatisation, has been critical of his predecessors’ economic policies.