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Mexico Should Review Incentives For New Nuclear Capacity, Says IEA

By David Dalton
1 March 2017

Mexico Should Review Incentives For New Nuclear Capacity, Says IEA
The two-unit Laguna Verde is Mexico's only commerical NPP

1 Mar (NucNet): Mexico should review and, if necessary, revise the incentives it offers to invest in nuclear power capacity if the country is to meet its plans to build three new reactor units that would enter commercial operation by 2028, 2029 and 2030, the International Energy Agency says in a report.

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 will probably not allow to invest billions in new nuclear units in the near future.

If, according to its plan, the government wishes to see new nuclear coming online in the next decade, 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, the report says it remains to be seen how this system will work in practice for nuclear, as under current rules the projects must be ready to generate power within three to five years from the 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.

The report is online: http://bit.ly/2lW05oT

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