Wind and Solar reportedly have a huge potential in Mexico’s liberalised energy markets and the reforms are being seen as a key to expanding energy.
It is estimated that by the end of 2018, the oil and gas industry in Mexico would be completely open to private investment from both foreign and domestic companies across the value chain. Since the liberalisation of Mexico’s energy markets, the country has become a role model for other countries who wish to encourage investment, competition, and innovation across their energy sectors.
Apart from which, 2018 would also be the year when Mexico would see the clean energy certificates (CECs) come into reality. The CECs is a key to the country’s transformative and ambitious law on renewable energy, which would find the amount of electricity generated from clean energy sources increase to 35% by 2024 and 50% by 2050.
Mexico reportedly introduced a new system of auctions for energy, capacity, and CECs offering long-term contracts to meet its goals. And, the auction system was designed to capture the relative values of different generation technologies based on location and production profile. The IEA has described the differentiated auction system as one of the most sophisticated procurement mechanisms for renewable energy.
Meanwhile, the impact of Mexican reforms having a wider impact is being discussed by experts. And, the country’s success has placed it among world leaders in blending climate change objectives into policymaking. So, countries like Argentina have reportedly followed the Mexican example in setting its own clean energy requirements. Apart from which, Chile is also being featured as one of the top performers in the Ernst & Young renewable energy country attractiveness index.
The latest auction by Mexico saw the world’s lowest average price for solar in regulated activity. Meanwhile, the country’s liberalised markets will continue to pose risks as well as opportunities, and the country would need to learn lessons and the tools of risk management along with its FDI.