Clean Energy Cost-Savings: A Study of Mexico’s Federal Electricity Commission (CFE)

Clean Energy Cost-Savings: A Study of Mexico’s Federal Electricity Commission (CFE)

Savings to CFE from Clean Energy Purchased at Long- Term Auctions In order to protect basic service customers and ensure that services are provided at the lowest price possible, LIE requires basic service providers to purchase their electricity and obtain their CEL certificates through public auctions hosted by Mexico’s National Energy Control Center (Centro Nacional de Control de Energía; CENACE) and open to both public and private generators on equal basis. During the previous administration, CENACE held three long-term auctions for purchasing clean energy (mostly wind and solar) and obtaining the corresponding CEL certificates, with extremely favorable results for CFE. Table 6 presents the average prices for the three auctions. Table 6. Clean Energy Cost from Long-Term Auctions

Energy cost + CEL (USD/MWh)

Long-Term Auction (LTA)

1st LTA 2nd LTA 3rd LTA

47.78 33.47 20.57

Source: CENACE communications The savings from contracted clean energies that CFE gained from these auctions- are evident when the price CFE has to pay for the clean energy is compared to the variable costs of thermal plants that would otherwise enter into service, as the data in Figure 5 indicate. In Figure 5, the four columns furthest to the right are the technologies and fuels being used at the Baja California Sur plants and some of the Yucatán plants, which were the focus of many clean energy offerings, particularly during the first auction. Figure 5. Variable Generation Cost of Thermal Plants vs. Clean Energy Cost

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