Early in 2016, the Mexican government began deregulating its electricity market in accordance with Ley de la Industria Eléctrica. For commercial, industrial, and institutional (C&I) organizations with electricity load in Mexico, this deregulation is outstanding news because it expands their capability to sign bilateral power purchase agreements (PPAs) directly with independent renewable power producers.
As Mexico’s deregulation continues, however, the new electricity market remains yet to be fully defined. A compelling opportunity for bilateral PPAs is still available for renewable energy projects that qualify under a Mexico self-supply regime—a regulatory structure originally available to project developers through December 31, 2016.
Mexico’s Federal Regulatory Improvement Commission (COFEMER) recently announced that extensions for certain developer projects have been approved. Thus, there will be an expanded window for the Mexico self-supply opportunity over the next 6-15 months.
There are a number of benefits to pursuing the self-supply structure. Given the uncertainty in the newly deregulated market, the self-supply regime provides a mechanism to lock-in energy prices. It includes fixed-cost wheeling charges, and enables organizations to enter into PPAs with a renewable project located anywhere in Mexico—which helps lower transmission costs and provides great flexibility to the energy user. C&I customers that utilize the self-supply structure are also relieved of the significant expense related to sourcing mandated Clean Energy Certificates (CELs).
Various projects are already eligible for self-supply benefits, and the time to start exploring PPA options in Mexico is now.
Download this industry update to learn more about the expanded window for self-supply opportunity in Mexico, and how it can benefit your organization.
The post BREAKING: Extensions Approved for Mexico Self-Supply Opportunity appeared first on Renewable Choice Energy.