Delays, emerging issues, and political uncertainty: Update on Mexico power markets

On September 12, Wood Mackenzie held a webinar discussing Mexico’s power market emerging issues and political uncertainty, with emphasis on the impacts of the debottlenecking of pipeline infrastructure, solar penetration and how it is reshaping fossil generation. In this presentation, we take a look at how the day-ahead dispatch market has evolved since its launch in 2016, how constraints emerged in 2017 and 2018 exploded as Yucatan Peninsula LMPs went above the US $170/MWh mark. Much needed pipeline and energy infrastructure that is well beyond the initial construction stage have been suffering delays as new challenges have emerged from the 2013 Historic Reform. Progress in late 2018 and early 2019 offer a glimpse of things to come – reinforcing our long-held key messages – as cheap US gas and new renewable capacity have already begun to ease power market pressure in northern regions of the SIN. However, political and regulatory uncertainty remains a major question going forward.