New Market Research Report: Mexico Power Report Q3 2016


Fast Market Research recommends "Mexico Power Report Q3 2016" from Business Monitor International, now available


[USPRwire, Thu May 26 2016] The launch of a wholesale power market and the success of the fi rst long-term energy auction in Mexico underscore the multiple business opportunities that w ill be on offer in the country 's reformed power sector. Coupled with robust macroeconomic prospects, significant public investment and our forecast for strong growth in power consumption, these regulatory advancements support our positive outlook for the Mexican power sector over the coming decade - with natural gas and renewables to outperform.Latest Updates And Structural TrendsMexico's wholesale electricity market was launched in late January 2016. Under the reformed power market, the state-controlled utility Comision Federal de Electricidad (CFE) - broken down in subsidiaries with budget and functional independence - and private market participants make offers to sell and buy electricity and ancillary services in day-ahead, hour-ahead and real-time markets. In addition, power generators are able to sell electricity to the CFE (via long-term and medium-term auctions to supply regulated clients) or directly to qualified consumers via bilateral contracts. Finally, the new market structure introduces Clean Energy Certificates (CEL).Solar and wind power dominated Mexico's first long-term energy auction, reinforcing our positive outlook for the Mexican renewables sector. Finalised in early April 2016, the tender awarded 15-year power purchase agreements and 20-year clean energy certificates (CEL) to 12 new solar power projects and five new wind farms. Mexico's low cost of labour, ideal natural conditions and significant domestic manufacturing capacity for solar and wind components allowed companies to present bids at very competitive prices. With power delivery from the projects expected to start in 2018, we have revised up our forecasts for solar and wind power capacity and generation in Mexico over our 10-year forecast period.On March 29, the agreement for the unbundling of the CFE was published on Mexico's official gazette, with the functional and regional separation of the company expected to be completed in June 2016. Under this regulation, the CFE will be separated in a number of independent companies that will carry out the activities of power generation, transmission, distribution and commercialisation. The units will have functional and regional diversification and will be financially distinct from each other.The unbundling of the CFE is a crucial step for the success of Mexico's wholesale power market. While competition and efficiency in the market will actually be fostered by the reform only if governing bodies comply with their mandates of avoiding unfair cooperation between the separated units of the CFE, progress in the restructuring process is a positive sign for potential investors in the Mexican power sector. Participation in the market has been relatively limited so far, as it was reported that in late March 2016 only two private generators were competing with the CFE in the

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