Cenace (the National Energy Control Centre) is Mexico’s grid operator and regulator. CENACE last week announced that the country’s fourth long-term electricity auction has been canceled again. In December, a day before bids were due, and two days after the new president Andrés Miguel López Obrador was sworn in — the auction was suspended.
Windpower Monthly reports that Brian Gaylord, senior analyst for Latin America at Wood Mackenzie Power and Renewables, described the CENACE decision as “ludicrous.” He tweeted that it was “extremely difficult to envision a logical reason” for the cancellation.
Ludicrous. Mexico cancels its 4th power auction round. 3rd round procured clean electricity at 20 USD/MWh. Extremely difficult to envision a logical reason. Impossible to imagine an alternative that doesn't result in higher electricity rates for Mexicans LatAmericaWind) February 1, 2019
Gaylord seems to think the cancellation of the auction was politically motivated, as the new government seems to want to modernize its old thermal and hydro power plants.
However, Green Tech Media points out that in a press conference on Monday, February 4, AMLO accused the previous government of using “scaremongering over power blackouts” as the reason for opening up the energy market.
When asked about the blackouts and power cuts throughout the country by a reporter, AMLO responded: “I’m going to ask Mr. Bartlett to inform them about the electric power plan. It is very interesting to explain to them what the new plan is, the new management policy of the Federal Electricity Commission. But I can tell you that there is no problem. There is too much electrical power.”
López Obrador said there is now a new policy, explaining his government wants to strengthen the Federal Electricity Commission, which like Pemex was neglected during the previous administration. AMLO also said there was a lot of corruption involved, and this led to the entire market ending up in the private sector, with very high costs.
The average price per contracted MWh dropped by 50 percent between the first and the third energy auction in Mexico, plunging to USD 20.57 (EUR 18) from USD 41.8 per MWh, according to Renewables Now.
In a tweet, Gaylord added that without the clean energy tenders, it was “impossible to imagine an alternative that doesn’t result in higher electricity rates for Mexicans.” Gaylord added: “They had such a great thing going with these auctions – especially the pricing of it – and there were no scandals (in development).”
