Mark Repsher, energy markets expert at PA Consulting, discusses the Mexican government’s suspension of a planned auction of long-term clean-energy contracts as the new administration of President Andrés Manuel López Obrador reviews the plan.
The article notes that Mr. López Obrador is skeptical about Mexico’s opening of the energy industry to the private sector, and plans to increase investment at state oil company Petróleos Mexicanos and state-owned electric utility CFE.
The independent power-grid operator, Cenace, said that the postponement of the Dec. 18 power auction until further notice will give time for the new government’s energy officials to revise the scope and aim of the program. The auction is the fourth in which developers vie to supply CFE with clean energy under long-term contracts.
The auctions helped lay the groundwork for the expansion of renewable energy in Mexico, although developers are also signing long-term contracts directly with large industrial users.
Mark says: “The auctions in a way have become an interesting sideshow, just to see how low prices will go."
He adds: "But there’s a lot of activity occurring outside of those auctions.”
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