Powerlines on hill against blue sky

Mexico’s power auction: A second bite at the cherry


Ed: This article predates November 2019, when ÅF and Pöyry came together as AFRY.

In this latest note, we review Mexico's second long term power auction, completed at the end of September.

Pöyry has been advising clients on the Mexican electricity market for over 4 years.  We have assisted clients before and during the transition into the new competitive energy market bringing over 20 years’ experience in energy markets around the globe. Mexico is becoming a very attractive market for renewable and thermal developers alike. 

The results of the second electricity auction were announced on the 30th September 2016 bringing some remarkable price levels for the development of renewable projects and firm thermal capacity. The auction was oversubscribed, with participants offering at least twice the required volume with only a third of participants securing contracts.

The average cost of clean energy obtained from the auction was 34.25 USD/MWh compared to 42.73 USD/MWh from the first auction. Solar projects broke the national record allocating energy at just 26.77 USD/MWh. The same auction allocated a total of 850 MW of firm thermal capacity with the lowest offer at just 24.09 USD/kW/year.

The full document is available to download below.

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