Mexico to hold 1st medium-term power auction in February

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Wednesday, August 16, 2017

Mexico will hold its first medium-term electric power auction in February 2018, the energy ministry announced.

The auction will be the country's fourth, following long-term auctions last March and September, with the third scheduled for November 22.

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Announcing the February auction on Tuesday, energy minister Pedro Joaquín Coldwell (pictured, center) said it will be open to all technologies for power generation.

The aim of the auction is for buyers and generators of electricity to enter into supply contracts for a maximum of three years, reducing exposure to risks in the short-term price market.

The first medium-term auction continues the modernization of the power sector begun with the 2014 energy reform, and will allow for the expansion of electricity infrastructure, Coldwell said.

The amount of electricity made available will be determined by the participants according to their commercial strategies and demand, he added.

Electricity under secretary César Emiliano Hernández Ochoa said that another of the advantages of the medium-term auction is that participants will be able to procure stable financing, given the shorter contract length.

In the November long-term auction, private firms will, as previously announced, be able to participate as buyers along with state utility CFE.

The national energy control center (Cenace) this week announced the offers made by the two private companies that have signed up to participate in the November auction, and the process of selection of the most competitive offers will be carried out via an 'optimization model' to achieve the most competitive purchase, the ministry said.

Also read: Mexico's 3rd power auction could triple country's renewables capacity