Friday, November 7, 2014

Mexican Renewables - Set for a Boom; Waiting for Guidance

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JD Supra Business Advisor

The sunset date for the 30% ITC is coming into view for developers of U.S. solar projects. The U.S. domestic solar market is also becoming increasingly competitive. The PTC for wind has already expired except for projects unless they managed to meet “commencement of construction” deadlines at the end of 2013.
At the same time, in December 2013 Mexico enacted constitutional amendments to open up the Mexican energy sector to private purchase participation and Enrique Peña Nieto subsequently submitted secondary laws, including the Ley de la Industria Eléctrica (or Electric Industry Law), to the Mexican congress in August of 2014.
Under the new laws there will be a new wholesale electricity market in Mexico, to be operated by the Centro Nacional de Control de Energía (CENACE). The Comisión Federal de Electricidad will lose its monopoly over the power generation industry and private parties will have the ability to become generators of power. The ultimate intent – the liberalization of the power generation industry. Additionally, one of the goals of the reform of the power sector is also to cause the electric industry and generators to move toward for clean energy sources.
As a result, many are expecting a Mexican renewable energy boom. According to Bloomberg New Energy Finance, renewable-energy investment in Mexico is already on pace this year to exceed the nation’s 2010 record of $2.4 billion.
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