Energy Advisor Quotes Dino Barajas on Mexico’s Renewable Energy Sector
Akin Gump cross-border transactions partner Dino Barajas was quoted by Energy Advisor in its Featured Q&A section on the topic of Mexico and its upcoming renewable energy auction. The publication posed several questions, among them, “Which energy sources are dominating Mexico’s renewables sector?”
Barajas said, “Renewable energy, particularly solar projects, is coming into its own in Mexico this year. Despite lower-than-expected pricing in last year’s energy auction, solar developers continue to flock to Mexico to establish beachhead projects and gain market share as the country’s renewable energy landscape continues to evolve.”
He added that mid-size solar projects, i.e., those ranging from 50-150 MW, are best positioned to gain a foothold in the country’s developing renewables market due to their more-predictable project costs as well as the fact that they benefit from economies of scale.
Barajas said these projects can be scaled up over time to take advantage of additional auctions or private-sector power purchase agreements.
He close by noting, “The decisive factor in determining the success of many projects will be the commercial banking sector’s comfort level with the applicable project’s contracted energy pricing. The ‘financeability’ of projects will ultimately determine where Mexico’s renewable energy market pricing finally settles and which technology dominates the market going forward.”