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News Article

Making Clean Energy Certificates Work

Wed, 02/24/2016 - 11:47

In the second presentation, Jesús Serrano dealt with a subject that certainly needs clarity in the electricity industry, which is how the Clean Energy Certificates (CELs) function. He explained that CELs, as stated in the Law of the Electricity Industry, are designed to promote the development of clean energy projects and will be a second source of income for clean energy generators, who were previously only able to profit from the sale of electricity.

Mexico’s clean energy generation goals will determine the amount of clean energy that should be incorporated in to the mix in 2018, 2021, and 2024. This, in turn, forces the purchase of clean energies until the generation objectives are met, and project development and the market will determine the cost to meet the goals. Therefore, bidders will seek projects that require the least additional investment to reach the government’s objectives. In this sense, CELs, explains Serrano, provide an attractive solution.

Both qualified users and clean energy generators have to register in order to participate in the CEL market. In the case of generators, a registration must be submitted, an audit has to be undergone, and a fee paid. Once a registered power central generates clean energy, CENACE will examine the information related to clean generation and then pass that information on to CRE, which will award and register the CELs. The certificates correspond to the previous month in terms of generation and consumption, and generators are free to use them in bilateral transactions, coverage contracts, or to sell them in the market or in CENACE tenders.

The authorities created an online mechanism similar to a bank account in which participants will be able to trade their certificates, and CRE developed a system called DECLARACEL so that players can report their CEL obligations to the authorities every month. The annual declaration has to be presented in May, and fines will be imposed according to the information given at the end of the period. Finally, Serrano explained the details of each certificate, as these will have a 16 character ID that will include information such as the technology used and the date the certificate was granted.