Mexico will start soliciting bids later this month in its first auction of renewable energy certificates, part of an electricity sector overhaul that ends the state-owned power company's monopoly, government officials said on Wednesday.

 

Initial awards of the new certificates, which provide the right and impose the obligation to produce clean energy, are set for March, officials said.

 

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 megawatts of additional power generation from clean sources like wind or solar.

 

National electricity company CFE will initially be the only buyer of the energy from companies that are awarded the certificates in the competitive tenders, but new wholesale power companies allowed by the energy overhaul will later be able to purchase it, too, said Energy Minister Pedro Joaquin Coldwell.

 

"This blueprint guarantees that there will be demand for companies that generate electricity from clean sources," said Joaquin Coldwell.

 

Mexico, a major crude oil producer and exporter, has for decades generated most of its power from fuel oil. Over the last several years, however, it has transitioned into cheaper and cleaner-burning natural gas as well as renewable sources.

 

The new contracts will also help CFE meet a mandate to generate at least 5 percent of its power from cleaner sources by 2018.

 

Further technical and financial details will be published on Nov. 19, when the bidding process starts.