AMLO govt cancels Mexico's 4th long-term electricity tender

Mexico’s electricity system operator National Energy Control Centre (CENACE) announced last week that the country’s fourth long-term electricity auction has been cancelled.

The fourth auction, and the first one in 2018, was supposed to take place in December, according to the timetable. However, after the arrival of the new government headed by president Andres Manuel Lopez Obrador, in early December CENACE and its newly appointed general director suspended the fourth round citing internal restructuring within the national bodies in charge of the energy policy.

The CENACE also said at the time that the purpose of the suspension was to review the objectives and the scope of the 2018 auction. Now it has been officially cancelled.

Brian Gaylord, senior analyst for Latin America at Wood Mackenzie Power and Renewables, said in a tweet on Friday that it was "extremely difficult to envision a logical reason".

Ludicrous. Mexico cancels its 4th power auction round. 3rd round procured clean electricity at 20 USD/MWh. Extremely difficult to envision a logical reason. Impossible to imagine an alternative that doesn't result in higher electricity rates for Mexicans https://t.co/sz8MiFSxBu

— Brian Gaylord (@LatAmericaWind) February 1, 2019

The average price per contracted MWh dropped by 50% between the first and the third energy auction in Mexico, plunging to USD 20.57 (EUR 18) from USD 41.8 per MWh.

Before the suspension, the fourth auction was in the last stages, however, it had attracted fewer interested parties than previous competitive procedures for energy. By late November, 26 companies had been qualified to participate, compared with 49 for the third auction held in 2017.

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