Changes in the Generation Dispatch Criterion in Mexico

CHANGES IN THE GENERATION DISPATCH CRITERION IN MEXICO: A SUMMARY OF DIRECT IMPACTS

Figure 1. Illustration of the change in dispatch

 Under a minimum cost dispatch, the merit order to generate implies an efficient allocation to supply all demand, both for basic service users and the rest of the consumers.

 The new dispatch order implies that CFE plants with higher variable costs displace more efficient private plants.

 Change is limited by basic service demand and CFE existing contracts.

Figure 2. Illustration of the change in dispatch Under the new dispatch order, the generation of plants with physical contracts is guaranteed, independently of their variable costs, displacing more efficient plants. See Figure 2.

INSTITUE OF THE AMERICAS | POLICY BRIEFING

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