Econonomics of Energy and Environmental Policy

Article Details

IAEE Members and subscribers to Economics of Energy & Environmental Policy : Please log in to access the full text article.

Policy Reversals in Transitional Markets: The Effect of Changing Marginal Cost to Physical Order Dispatch in the Mexican Power Sector

This study explores the 2021 Mexican electric reform that proposes changing the power dispatch from a marginal-cost-based to a command-and-control physical system. The new law forces the state power company to dispatch before private generators. We use the GENeSYS-MOD techno-economic energy model to determine the reform's effect on the power sector's generation mix, energy emissions, and market structure. Our findings reveal that although the merit-order change increases the share of generation with fossil fuels and CO2 emissions for the first decade after policy adoption, scenarios start to converge after 2030 because of the substitution of old and inefficient state-owned power plants with renewable facilities. On aggregate, changing the dispatch order results in 189 TWh of lost renewable generation and an increase of 188.93 (Mil. tCO2) in power sector emissions.
Purchase PDF ( $35 )
Executive Summary: View

Keywords: Transitional markets, electricity, dispatch order, greenhouse gas emissions, energy policies

DOI: 10.5547/2160-5890.13.1.rgut

Reference information is available for this article. Join IAEE or purchase the article to view reference data.

Published in Volume 13, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


© 2024 International Association for Energy Economics | Privacy Policy | Return Policy