On January 31, 2019 the Mexican power regulatory entity — Centro Nacional de Control de Energia (“Cenace”) canceled the fourth public bid for the purchase and sale of clean energy, capacity and clean energy certificates (“CEL”). This decision was extremely controversial, given that the first three bids were very successful and incentivized clean energy investment and project development in Mexico, particularly for solar and wind projects. The new administration has taken certain actions that have had the effect of slowing down the execution of agreements with the state utility, CFE. However, applicable law establishes two obligations that will continue to foster the development of new electricity projects in Mexico and the execution of power purchase agreements between private parties: i) the obligation to obtain CELs and ii) the obligation for utilities to execute power purchase agreements to guarantee the estimated consumption of their load points. Such obligations apply to all wholesale electricity market participants and, therefore, opportunities for investments in power projects in Mexico must continue.

The Obligation to Obtain Clean Energy Certificates

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