1st Mexican Electricity Auction is the beginning of a new RE chapter worldwide
Ata renewable has been operating in Mexico for several years, working relentlessly on renewable projects and betting on the long term future of the market. Which is why the 29thof March we were all holding our breath in the office waiting for the renewable energy auction results. Due to a little mishap the permanent results were actually re-released on March 30th
Figure this: early morning in the office with popcorn, lime and some chilito, watching as the renewable energy auction unfolded. We weren´t alone. Renewable energy companies around the world cheered on as the 1st Mexican Electricity Auction opened a new chapter for the industry.
If you are not familiar with the Mexican energy landscape, the key that you need to know is that the Mexican Electricity Auction is the first auction for long-term contracts following the Energy Reform – which took the energy generation industry from a state-run monopoly into a marketplace with different privately-owned Independent Power Producers (IPPs)
The results of this auction are surprising in two fronts. First, the fact that 74% of the capacity was allocated to solar rather than wind projects speaks to the interest in the market.
Second, the average price achieved in the auction is very aggressive at $50.7/MWh; especially considering its broad range: Enel Green Power’s 437 MW solar project was awarded at $35.44/MWh, whist Photoemeris Sustentable’s 29 MW project closed at $67.5/MWh. The median price for solar has come in at around US$45.15 per MW/h, according to a press release from the solar industry association ASOLMEX.
11 developers from 5 different countries won the auction. Together, they will build 16 new projects of renewable energy generation that will be built in 2018 including 11 solar photovoltaic (PV) parks and 5 wind power plants
The winning companies in the contest were Sunpower (269 GWh) Italy’s Enel Green Power Mexico (2,250 GWh), Canadian Solar subsidiary Recurrent Energy (141 GWh) Vega Solar (740 GWh), China’s JinkoSolar (503 GWh), Photoemeris Sustenable (55 GWh) and Sol de Insurgentes (61 GWh), according to a press release by Mexico’s Secretary of Energy.
- The cumulative investment will be around US$2.6bn
- The projects will be built in different states: Guanajuato, Coahuila, Yucatan, Aguascalientes, Jalisco, Tamaulipas and Baja California Sur
- The electricity generated will be added the national electricity system from 2018; resulting in 86MW extra the current installed capacity
In terms of capacity the auction fell a bit short of expectations as 5.4TW/h of capacity were assigned, representing about 85% of the target. The auction was also expected to place 6.3m Clean Energy Certificates (CEL) whilst the actual number they placed was 5.4m.
The winners bids in detail:
Enel Green Power: The Italian company Enel won three contracts to install solar parks, a total investment of just over 508m MXN. The parks will be located in the state of Coahuila and Guanajuato
JinkoSolar Investment: The Chinese firm Jinko won 3 contracts to generate solar energy in Jalisco and Yucatan. It amounted to 459m MXN
Aldesa Renewable Energy: The firm won 2 contracts for wind power in Yucatán, for an investment 239m MXN
Solar Vega 1 S.A.P.I. de C.V: This consortium with Sun Power won 2 contracts for power generation Solar Photovoltaic in Yucatan. The investment will be 727m MXN.
SunPower Systems: Sunpower Systems Mexico, Mexican subsidiary of SunPower US, submitted a bid of 205m MXN for a project located in Guanajuato
Energía Renovable Península : The company submitted a financial offer of 314m MXN for wind project in Yucatán
Recurrent Energy Mexico: 117m MXN. Photovoltaic Solar will be the technology in the state of Aguascalientes
Sustainable Photoemeris: Solar photovoltaic technology in the state of Yucatán. Its financial offer was for 64m MXN
Energía Renovable del Istmo II: 2 contracts for wind power generation in Tamaulipas for an approximate 435m MXN
Sol de Insurgentes: A solar Energy plant in Baja California Sur with a financial offer of 501m MXN
Consorcio Energía Limpia: They´ve been awarded a contract to generate wind power and installed in Yucatán. The economic proposal was for 338m MXN
The industry has been requesting certainty for a long time. We now have the certainty we were seeking. All the celebrations have taken place, the congratulations have been given and the time has come to start working. Mexico offers an opportunity for the industry to best itself, to become more competitive. We will keep reporting from the trenches of the industry, knee deep in work. We´ve always worked to make a difference and now we have a huge challenge and a better opportunity in front of us.