Changes in the Generation Dispatch Criterion in Mexico

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

Figure 3. General implications of changing the dispatch order

 In order to satisfy the same demand CFE’s more inefficient plants are forced to generate.

 Private efficient generators are displaced despite they have lower variable costs.

 As a result, CFE Basic Service will face a cost overrun while the wholesale market faces a reduction in LMPs, which will incentivize a migration towards the qualified service.

INSTITUE OF THE AMERICAS | POLICY BRIEFING

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