Are Mexican Renewables Really this Cheap?

04 December 2017
By Veronica Irastorza et al.

Associate Director Veronica Irastorza published an article titled “Are Mexican Renewables Really this Cheap?” on the Energy Institute at HAAS’s Energy Institute Blog. Co-authored with UC Berkeley Associate Professor Lucas Davis, the piece examines the dramatically low prices of renewable electricity to come out of Mexico’s most recent renewables procurement auction. The authors establish that, because renegotiation is not an option, the winning companies may have bid below cost to give themselves an advantage in Mexico’s future energy investments. However, economic and environmental circumstances also played a role: the energy market is dominated by larger companies that can run more cost-efficient projects, and Mexico’s geography lends itself to excellent solar and wind power generation.