México’s recent energy reform intends to foster competitiveness and private investment throughout the electric power sector value chain. This should increase port economic growth and job creation by delivering competitively-priced, reliable, clean, and secure electricity. The system is moving from a completely state-owned national utility, which provides everything from generation to transmission, distribution, and retail, to a highly competitive market. The primary features of the new system include:
- Transformation of the Federal Electricity Commission (CFE) into several generation companies, which will ultimately become separate and independent distribution and retail companies.
- Creation of the National Centre for Energy Control (CENACE) in 2014 to perform operational control of the national electrical system and the operation of the wholesale electricity market, as well as expand and modernize the national transmission network and the elements of the general distribution networks corresponding to the wholesale electricity market.
- Providing independent power producers with market access via a new wholesale market for most of the country.
- Offering private entities with the possibility to get into the transmission business.
- Implementing an auction system.
Auctions aim to allow basic service providers to enter into long-term contracts in a competitive and prudent manner to meet the needs of power, cumulative electrical energy and clean energy certificates (CELs), to allow other responsible loading entities to participate, and to allow sellers to have a stable source income to support efficient investments in new power plants or to upgrade existing ones. The first two auctions were held in 2016 where the approximate cost of energy was 0.04 USD/kWh. A third auction is planned for April 2017.