Mexico electricity market reforms attempt to reduce costs and develop new capacity

07/07/16 Business Day

energy - oil_rigMexico is in the process of reforming much of its electricity industry. Earlier in 2016, Mexico opened up day-ahead and real-time trading in a new wholesale power market. Although wholesale prices briefly spiked for a handful of hours, average prices in most locations during the market’s first six months of operation have ranged from 880 to 1,100 pesos per megawatt hour (MWh), or about $48/MWh to $60/MWh.

Electricity prices in Mexico near the United States border have generally been lower than prices in Mexico’s relatively isolated peninsulas. Prices in the Tijuana and Ensenada zones averaged $23/MWh during the first six months of 2016, similar to prices across the border in Southern California.

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