March 30, 2016

Holland & Knight Involved in Mexico's Inaugural Long-Term Power Auction

Holland & Knight Alert
Carlos Ochoa | Aldo Gonzalez

Mexico's National Center for Energy Control (CENACE) launched the first long-term power auction in the country's history in November 2015. The auction was mainly targeted to clean energy producers, with 73 percent of the total sale offers submitted from solar power plants, 21.7 percent from wind farms and 5.3 percent from other clean technologies.

Private companies were eligible to offer, for the first time, three different products – power, capacity and clean energy certificates (CELs) – to the Federal Electricity Commission (CFE), which acted as the sole purchaser during this process. On March 29, 2016, CENACE announced that 69 out of 81 prequalified companies submitted a final bid to meet CFE's purchase offer. Holland & Knight clients participated with 18 project bids and a total installed capacity of 750 megawatts (MW), representing more than 10 percent of the final pre-qualified bidders.

Auction Background 

The auction process began on Nov. 19, 2015, with the publication by CENACE of the Call to Bid, aiming to award long-term power purchase agreements (PPAs) of 15 to 20 years to be entered with CFE. Holland & Knight's Mexico City office represented eight bidders in the auction, all of which were successfully pre-qualified to submit a final bid.

According to the purchase offer submitted before CENACE in January, CFE foresees acquiring a total of 500 MW of capacity, 6.3 million megawatt-hours (MWh) of power and 6.3 million CELs.

This long-term auction sets a milestone for Mexico's electric industry, opening a new business sector for domestic and foreign companies seeking investment opportunities in the country. The energy team from Mexico City's office was led by Partners José Antonio Prado and Carlos Ochoa, with assistance in the auction process from Associates José Toriello and Aldo González.
   


 

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.


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