IEA says Mexico should revise incentives for nuclear construction

7 March 2017

An International Energy Agency report, ”Energy Policies beyond IEA countries: Mexico 2017”, published on 28 February, said Mexico should review and, if necessary, revise the incentives offered to invest in nuclear power capacity if it is to realise its plans to build three new reactor units for commercial operation in 2028, 2029 and 2030. 

Mexico's only commercial nuclear plant is the Laguna Verde plant, comprising two 654MWe General Electric boiling-water reactors (BWRs), which were subsequently uprated 800MWe. A major issue with investing in new nuclear capacity concerns the availability and cost of capital, the report says. By law, nuclear power generation in Mexico remains a Federal Electricity Commission (CFE) monopoly, but the company’s financial position may not allow it to invest billions in new nuclear units in the near future. Therefore, private investment will be required, the report concludes.

Investment in new capacity and expanding existing capacity will be encouraged by long-term contracts for energy (15 years), and capacity and clean electricity certificates (20 years). However, how this system will work in practice for nuclear is unclear, as current rules stipulate that projects must be ready to generate power within three to five years from auction.

“The government is aware that this timeframe is not compatible with its nuclear development plans, and the rules should be adapted if nuclear projects are to be competitive in the clean energy auctions.” The report urges Mexico to continue efforts to implement a national policy on long-term management of radioactive waste and on the ultimate disposal of high-level waste. Mexico also needs to set up a fund to cover future liabilities related to waste management and decommissioning, the report says.


Photo: Laguna Verde nuclear plant



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