Our efficient process and strong network with regulators and energy suppliers allows companies to lower energy costs in Mexico’s newly-deregulated energy market. Our consultants manage and monitor the entire RFP process and provide due diligence and risk analysis reports for each PPA proposal. We work directly with your legal team during the final contract negotiations with the selected supplier, and we facilitate the Qualified User and Assets Registration process.
Procurement of retail supplier to purchase electricity on the wholesale markets
Identify all viable suppliers and perform pre-qualification process
Perform a comprehensive RFP process with high-quality suppliers
Contracting and implementation
Registration of assets and installation of transformers and meters
May 14, 2020
May 01, 2020
The status of energy auctions in Mexico has become increasingly complicated, but private auctions still promise to help Mexico transition to clean energy. The immediate impact of private auctions will mostly be on existing projects, but they could lead to additional renewable energy development in the future. Some generators under construction were unable to contract all their energy or received overly low prices at previous auctions.
March 20, 2020
New pipelines have enormous potential to support increased natural gas production in Mexico and also reduce the costs of imports. Although there is already an impressive pipeline infrastructure for transporting natural gas from the U.S. into Mexico, it does not reach the entire country. Most of the less expensive piped gas goes only to the northern states of Mexico, in part to provide power for factories.
A bilateral power purchase agreement (PPA) has a different risk profile than a contract with Mexico's state-owned electric utility, CFE. As the Mexican economy faces pressure from the coronavirus and lower oil prices, it is crucial to reevaluate risks. In theory, commercial and industrial (C&I) providers are more vulnerable to economic cycles and shocks. CFE provides essential services to many consumers, so it is supported by a much larger revenue base, as well as the Mexican government. We expect that CFE will be able to deliver on its contracts, despite credit rating downgrades throughout Mexico.
Congestion pricing risk might be less of an issue in the short-term due to lower overall electricity usage. Rapid growth in Mexican power consumption often pushes the electrical grid to the limit of its capacity. When that happens, the cost of transferring power across the network rises. CFE always assumes this risk, but bilateral PPAs are more flexible. Temporarily higher electricity transmission fees due to congestion may be assigned to either party in a bilateral PPA, which usually increases risk.
Contact us today
Our mission is to help clients successfully execute on projects in Mexico’s energy sector. We put our client’s interests ahead of our own and we always maintain an independent perspective.
30 Wall Street, New York, NY 10005
+1 212 901 8601
Lago Alberto 319, Col. Anahuac, CDMX, 11520
+52 55 8652 8023
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