Gabriel Salinas, a partner in Orrick's Latin America practice in Houston, recently spoke with The Wall Street Journal regarding Mexico's decision to open its electricity market to outside investment after decades of state control. The country recently held its first auctions for companies to bid to sell renewable energy to the state-owned utility Comisión Federal de Electricidad under long-term contracts. Purchase contracts have been awarded for 8.9 million megawatt hours a year of electricity, primarily from wind and solar power.
Gabriel noted, "This is good for Mexico. Two of the main goals of the electricity reform are to bring electricity prices down and enhance Mexico's clean fuel generation, and by those standards I think the auctions have been a success."
Gabriel added that the auctions have drawn not only generating companies, but also manufacturers of equipment. "The line between a supplier and a generator is not as clear. I think now we're talking about being in wind, or solar, or geothermal. There seems to be more of a competition between technologies than between different types of players," he said.
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