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)

Figure 1. Variable Generation Cost

Once the variable costs of thermal power plants have been estimated, it is key to correlate them with the electricity rates currently in effect for medium- and high-voltage transmission. These rates, known as Medium Voltage Hourly High-Demand rate (Gran demanda de media tensión horaria; GDMTH) and Industrial Demand Subtransmission rate (Demanda industrial en subtransmisión; DIST), are the tariff rates paid by the vast majority of CFE customers. Table 5 shows these CFE rates for the month of June in Mexico’s Bajio region in U.S. dollars per MWh, while Figure 2 compares current tariff rates to variable costs that could be avoided through the use of available clean energy. Table 5. CFE Rates CFE Rates GDMTH DIST $/kWh USD/MWh $/kWh USD/MWh Base 0.9580 45.62 0.9940 47.33 Intermediate 1.6907 80.51 1.6162 76.96 Peak 1.9243 91.63 1.9145 91.17 Note 1. CFE: June 2021 rates for the Bajio region (Salamanca, Gto.) Note 2. Rates converted to U.S. dollars using an exchange rate of MXP$21/US$1.

As shown in Figure 2, the variable cost for fuel oil–fired power plants is unrecoverable, even under peak rates.

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