Includes 3 FREE quarterly updates
BMI View: Whilst we continue to hold the view that gas generation will remain dominant in Mexico, supported by existing capacity and access to cheap gas, we note that this quarter has seen some interesting developments in the hydropower sector. Most notably, the Federal Electricity Commission (CFE) sold MXN13.5bn (some US$1.05bn) in bonds on the domestic market to finance construction of the La Yesca hydroelectric power plant in September 2012. With regard to consumption, we continue to anticipate a fairly robust 3.07% year-on-year (y-o-y) average growth for power consumption in 2012, but we caution that a moderation is likely in 2013. Despite the fact that Mexico's economy is expected to remain in positive territory, our Country Risk service believes that the country’s headline growth will slow gradually throughout H212 on the back of a moderation in both the secondary and tertiary sectors. Hence we anticipate that a robust 3.07% y-o-y growth for power consumption in 2012, will give way to a slightly less positive 2.93 in 2013. That said, a still relatively positive long term outlook underpins our forecasts for a fairly robust 2.74% y-o-y average growth of Mexico's power consumption between 2013 and 2021. A trend further supported by considerations concerning the country's low per capita consumption and relatively high energy intensity. With Mexico relatively well placed compared to some of its regional peers in terms of its power generating infrastructure, we reiterate our view that, while new investments will be necessary to substitute ageing capacity and meet growing demand, attempts to diversify the energy mix will be a key component and driver of capacity expansion and refurbishment programmes. From this perspective, we notice that:
BMI View: Whilst we continue to hold the view that gas generation will remain dominant in Mexico, supported by existing capacity and access to cheap gas, we note that this quarter has seen some interesting developments in the hydropower sector. Most notably, the Federal Electricity Commission (CFE) sold MXN13.5bn (some US$1.05bn) in bonds on the domestic market to finance construction of the La Yesca hydroelectric power plant in September 2012. With regard to consumption, we continue to anticipate a fairly robust 3.07% year-on-year (y-o-y) average growth for power consumption in 2012, but we caution that a moderation is likely in 2013. Despite the fact that Mexico's economy is expected to remain in positive territory, our Country Risk service believes that the country’s headline growth will slow gradually throughout H212 on the back of a moderation in both the secondary and tertiary sectors. Hence we anticipate that a robust 3.07% y-o-y growth for power consumption in 2012, will give way to a slightly less positive 2.93 in 2013. That said, a still relatively positive long term outlook underpins our forecasts for a fairly robust 2.74% y-o-y average growth of Mexico's power consumption between 2013 and 2021. A trend further supported by considerations concerning the country's low per capita consumption and relatively high energy intensity. With Mexico relatively well placed compared to some of its regional peers in terms of its power generating infrastructure, we reiterate our view that, while new investments will be necessary to substitute ageing capacity and meet growing demand, attempts to diversify the energy mix will be a key component and driver of capacity expansion and refurbishment programmes. From this perspective, we notice that:
- Mexico's adoption of both CO2 emissions and renewable electricity generation targets in 2012 has cemented the country's desire to develop its renewables industry. The country has made significant headway in the expansion, as a number of large developments come online and the project pipeline continues to strengthen. However, we maintain our assessment that if Mexico is to meet the ambitious targets outlined by the legislation, a comprehensive regulatory framework will need to be put in place in order to sustain the level of investment, and thus, growth in the sector.
- Despite some persisting difficulties in the sub-sector, a few selected hydropower projects are gaining traction in the country, with the CFE selling MXN13.5bn in bonds on the domestic market to finance construction of the La Yesca hydroelectric power plant in September 2012. La Yesca is part of the Santiago Hydroelectric System, which includes 27 projects with potential generating capacity of 4,300MW and will rank No. 3 in electricity generation after the Aguamilpa-Solidaridad and El Cajon power plants.
- That said, the country currently relies on thermal sources for over 75% of its electricity generation, making any significant capacity diversification programme a time-consuming and costly endeavour. From this perspective, it is hardly surprising that the country continues to be keen to focus on gas-fired power plant construction, and the picture is unlikely to change substantially over our forecast period (2012-2021).
BMI Industry View
SWOT Analysis
Mexico Power SWOT
Regional Industry Overview
Industry Forecast Scenario
Mexico Snapshot (Macro)
Table: Country Snapshot: Economic and Demographic Data
Table: Country Snapshot: Power Sector
Mexico Forecast Scenario
Electricity Generation And Power Generating Capacity
Table: Mexico Total Electricity Generation Data And Forecasts, 2010 - 2017
Table: Mexico Total Electricity Generation Long Term Forecasts, 2014 - 2021
Table: Mexico Electricity Generating Capacity Data And Forecasts, 2010 - 2017
Table: Mexico Electricity Generating Capacity Long Term Forecasts, 2014 - 2021
Electricity Consumption
Table: Mexico Total Electricity Consumption Data And Forecasts
Table: Mexico Total Electricity Consumption Data And Forecasts
Transmission & Distribution, Imports & Exports
Table: Mexico Electric Power Transmission And Distribution Losses Data And Forecasts, 2010 - 2017
Table: Mexico Electric Power Transmission And Distribution Losses Long-Term Forecasts, 2014 - 2021
Table: Mexico Trade Data And Forecasts, 2010 - 2017
Table: Mexico Trade Long-Term Forecasts, 2014 - 2021
Table: Mexico Transmission Lines As Of June 2012
Key Policies/Market Structure
Regulation And Competition
Sustainable Energy Policies
Pricing
Key Projects Database
Table: Mexico Key Projects
Risk Reward Ratings
Latin America Regional Power Risk/Reward Ratings
Table: Latin America Power Risk/Reward Ratings
Mexico’s Power Risk/Reward Ratings
Risks
Competitive Landscape
Comision Federal de Electricidad
Iberdrola
Union Fenosa
Glossary of Terms
Table: Glossary of Terms
Methodology And Sources
Industry Forecasts
Power Industry - Data Methodology
Generation and Consumption Data
Electricity Generation Capacity Data
Power Risk/Reward Ratings Methodology
Table: Power Risk/Reward Indicators
Sources
SWOT Analysis
Mexico Power SWOT
Regional Industry Overview
Industry Forecast Scenario
Mexico Snapshot (Macro)
Table: Country Snapshot: Economic and Demographic Data
Table: Country Snapshot: Power Sector
Mexico Forecast Scenario
Electricity Generation And Power Generating Capacity
Table: Mexico Total Electricity Generation Data And Forecasts, 2010 - 2017
Table: Mexico Total Electricity Generation Long Term Forecasts, 2014 - 2021
Table: Mexico Electricity Generating Capacity Data And Forecasts, 2010 - 2017
Table: Mexico Electricity Generating Capacity Long Term Forecasts, 2014 - 2021
Electricity Consumption
Table: Mexico Total Electricity Consumption Data And Forecasts
Table: Mexico Total Electricity Consumption Data And Forecasts
Transmission & Distribution, Imports & Exports
Table: Mexico Electric Power Transmission And Distribution Losses Data And Forecasts, 2010 - 2017
Table: Mexico Electric Power Transmission And Distribution Losses Long-Term Forecasts, 2014 - 2021
Table: Mexico Trade Data And Forecasts, 2010 - 2017
Table: Mexico Trade Long-Term Forecasts, 2014 - 2021
Table: Mexico Transmission Lines As Of June 2012
Key Policies/Market Structure
Regulation And Competition
Sustainable Energy Policies
Pricing
Key Projects Database
Table: Mexico Key Projects
Risk Reward Ratings
Latin America Regional Power Risk/Reward Ratings
Table: Latin America Power Risk/Reward Ratings
Mexico’s Power Risk/Reward Ratings
Risks
Competitive Landscape
Comision Federal de Electricidad
Iberdrola
Union Fenosa
Glossary of Terms
Table: Glossary of Terms
Methodology And Sources
Industry Forecasts
Power Industry - Data Methodology
Generation and Consumption Data
Electricity Generation Capacity Data
Power Risk/Reward Ratings Methodology
Table: Power Risk/Reward Indicators
Sources
