May 3, 2016

Call to Bid Issued for Mexico's Second Long-Term Power Auction

Holland & Knight Alert
Carlos Ochoa | Aldo González

Mexico's National Center for Energy Control (CENACE) on April 29, 2016, published its call to bid for the second long-term power auction in Mexico, seeking to award power purchase agreements (PPAs) of 15 to 20 years, primarily to clean energy producers. It is expected that in this second power auction, other load points responsible entities also will be entitled to purchase energy along with the Federal Electricity Commission (CFE).

Bidders interested in participating in this second power auction are eligible to offer power, capacity and clean energy certificates (CELs) to the CFE, which will be acting again as purchaser for this auction. The bidding guidelines will be published by CENACE on May 13, 2016, and the deadline for bidders to register is on July 22, 2016, with an approximate registration fee of US $1,550.

In order to participate, bidders should submit information evidencing their experience in the development and financing of energy projects, as well as a bid bond for an amount calculated accordingly to the size of its offer. The call to bid provides that power plants related to the offers submitted must be commercially operating by Jan. 1, 2019.

First Power Auction Results

According to the results of the first power auction, CFE contracted more than 5.4 million megawatts (MW) of power, including 1.384 million MW from wind energy sources and 4.018 million MW from solar projects, and 5.38 million CELs. However, no capacity was awarded.

The energy team from Holland & Knight's Mexico City office, led by Partners José Antonio Prado and Carlos Ochoa, represented eight bidders in the first power auction, all of which were successfully prequalified to submit a final bid. The firm's clients participated with 18 projects and a total installed capacity of 750 MW, representing more than 10 percent of the final prequalified bidders.

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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