A Snapshot of the Mexican Clean Energy Obligations System

Abstract

This article explains the main features of the Clean Energy Obligations Market (‘CEOM’) and the relevance of the brand new Energy Transition Act (the ‘Act’), both enacted as part of the Mexican Energy Reform of 2013. The CEOM is designed to incentivize the sustainable growth of renewalable energy capacity by requiring qualified consumers and suppliers to obtain clean energy certificates that represent electricity produced from renewable sources (wind, solar, tidal, geothermal, biofuels, etc.). Although similar mechanisms have been successfully implemented worldwide, they did not achieve success overnight. This article briefly analyzes these mechanisms to highlight certain key aspects that policymakers, in Mexico and elsewhere, should bear in mind when implementing systems like the CEOM.