Ingeniería de la energíaIsabel Lascurain Gutiérrez

Clean Energy Certificates

Anier Isabel Peña FajardoLizbeth Martínez Patatuchi Jorge González Esquinca

�1

Index

Introduction

The constitutional reform approved at the end of 2013 and the associated secondary legislations adopted in August 2014 and 2015 provide for a fundamental transformation of Mexico’s energy sector.On the basis of those legislative changes Mexico created a wholesale power market with a system of capacity and power auctions in which renewable energy technologies can take part and are additionally supported by Clean Energy Certificates (CLEs).

ObjectivesDuring this document we’re going to learn about the next topics:

• Establish requirements

• Encouraging the development   

• Promote new investments in clean energy

• Allow the national goals of efficience

Index 2Introduction 2Objectives 2How do they work? 3Characteristics 3Process to get a CEL 4How do you get one? 4Mexico renewable energy 5Conclusion 6References 6

�2

How do they work?The Electric Industry Act (LIE) defines in Article 3, section VIII, Clean Energy

Certificates (CELs) as the title issued by the Energy Regulatory Commission (the Commission) that accredits the production of a determined amount of energy Electricity from Clean Energies and that serves to fulfill the requirements associated to the consumption of the Centers of Charge.A CEL covers the generation of 1 MWh of clean electric energy.

CharacteristicsSince the CEL is a market instrument, its price is not fixed, but depends on supply

and demand; Market Participants may submit offers to sell CEL at any price, as well as submit offers to buy CEL at any price. The purchase and sale may be made through the CEL Market which will be organized at least once a year by CENACE, and may also be freely traded through Bilateral Agreements or Long Term Auctions.The following are some characteristics about CEL certifications:

• The government determines the requirements for CELs on a yearly basis three years in advance of the compliance period.

• The first compliance period will be in 2018 with quota set at 5% level. • All clean energy generators, defined as power plants using clean energies, developed

after August 2014 will receive 1 CEL/MWh generated. • Certificates will be issues to the generators for period of 20 years. • Clean energy certificates are bankable and do not expire. • Penalty for non-compliance is between USD 30-250/MWh. • The certificates can be purchased and sold, under monitoring of the regulatory

commission of energy. • Up to 6 million of the certificates will be awarded in the first auction via 20-year contracts

that seek to produce up to 2,500 MW of additional power generation from clean energy sources.

�3

Process to get a CELThey will be granted within the System of Management of Certificates and

Compliance of Clean Energies (the System). The participants of the System must be registered within the System in order to be able to receive the CEL or to liquidate or cancel their obligations. To participate in the system they must:

• Apply for enrollment in the System.• Have certification by a unit accredited by the CRE that the Power Plant generates

electricity from clean energies.• Pay the rights to registered in the System.

The Commission will use the System to carry out the management and registration of the information associated with the generation and consumption of electricity, the emission, transactions between participants, and the verification of compliance with Clean Energy obligations.The following is a schematic illustrating the procedure for receiving CEL.

Image 1: Schematic illustrating the procedure for receiving CEL. http://www.gob.mx/cre/articulos/preguntas-frecuentes-sobre-los-certificados-de-energias-limpias

How do you get one?1. Participants in the electricity sector.

2. They can be bought by large consumers and residential suppliers, as CFE.

3. Electrical generators whose operation began after August 2014

4. Before August 2014 and have increased electricity generation by clean energy.

5. Apply for registration.

�4

6. Have CRE certification for Electrical Central.

7. Pay for Registration rights.

8. Monthly/annual statement

Mexico renewable energyThe renewable energy market in Mexico is currently shaped by the General Law on

Climate Change, published on June 6 2012. The law affirmed Mexico’s intent to increase electricity generated from clean energy sources, including nuclear energy, to 35 percent by 2024 and 50 percent by 2050; and set a national goal to reduce greenhouse gas emissions by 30 percent by the end of the decade. Additionally, the Mexican renewable energy market has improved as a result of the energy reforms passed into law in August 2014. The reform package was largely designed to facilitate private investment, both foreign and domestic, in oil and gas development. Additionally, the law is expected to positively impact Mexico’s entire power sector, including electricity, with special focus on renewables, due to Mexico’s commitments to climate change as expressed on the intended National Determined Contribution (INDC) that Mexico submitted in at the COP 21 held in Paris in 2015. The energy reform was not only designed for the oil and gas sector, but also to liberalize the electricity generation market; to open future development to private firms; and to create competition among energy producers. Previously, the majority of Mexico’s electricity was generated by the Federal Electricity Commission (CFE), Mexico’s state-owned utility company. The reform package created an independent grid operator (CENACE) who controls a new, wholesale market and enables customers to purchase power directly from producers. The creation of CENACE has established an independent power producer (IPP) market for the first time in Mexico. The energy reform also mandates the creation of a clean energy certification scheme which will be administered by Mexico’s Energy Regulatory Commission (CRE). This scheme is known as Clean Energy Certificates (CELs)) and its objective is to establish requirements to use a percentage of clean energy in the power generation projects. It will be the primary mechanism for encouraging the development of clean energy capacity.  Clean Energy Certificates are also an instrument to promote new investments in clean energy and allow the national goals of efficiently generating clean energy at the lowest cost for the country to become individual goals. 

�5

Conclusion It is important to know the different certifications of energy that exist and what we

can do to obtain them, as well as to encourage Mexican companies to obtain these certifications to improve industrial performance and raise awareness about the environmental benefits that can be created from small Changes.

ReferencesPUBLIC POLICY AND OPPORTUNITIES OF INVESTMENT ON CLEAN ENERGIES IN THE FRAMEWORK OF THE ENERGY REFORM OF MEXICO. EFRAÍN VILLANUEVA ARCOS GENERAL DIRECTOR OF CLEAN ENERGY MINISTRY OF ENERGY, MEXICO. NOVEMBER 9TH, 2015. http://mexiko.ahk.de/fileadmin/ahk_mexiko/solarenergie_2015/presentaciones/3._SENER_Efrain_Villanueva_A..pdf

export.gob. Mexico - renewable energy. https://www.export.gov/article?id=Mexico-Renewable-Energy

Comisión Reguladora de Energía. Preguntas Frecuentes sobre los Certificados de Energías Limpias. 18 de agosto de 2016. http://www.gob.mx/cre/articulos/preguntas-frecuentes-sobre-los-certificados-de-energias-limpias

Roberto Rodriguez Labastida. Mexico’s Power Market Moves Ahead. February 22, 2016. https://www.navigantresearch.com/tag/clean-energy-certificate

�6