Mexico opens tender for 1.5 GW Baja California transmission line

The Government of Mexico has started the tender process for the Baja California Transmission Line project. The tender is seeking a developer to install and operate a 1,400 km transmission line linking Seri, in the state of Sonora, in north-west Mexico, to Cucapáh in the state of Baja California. The latter occupies the northern half of the Baja California peninsula, which is separated from mainland Mexico by the Gulf of California and the Colorado River.

The line will connect the isolated Electric System of Baja California with the National Interconnected Electric System. The selected developer will construct two converter stations and a high voltage direct current transmission line, with a voltage level of ±500 kV and a transmission capacity of 1,500 MW.

The Ministry of Energy (SENER) will award a design, finance, build, operate and transfer (DFBOT) contract to the successful bidder. The term of the contract will be 30 years. At the end of the term all the assets will be transferred to the Mexican State.

The total investment of the project is anticipated to exceed US$1 billion.

Last week the government opened registration, which interested parties are invited to do until 23 April. In order to be eligible, applicants must prove a minimum stock equity of MXN500 million (US$26.8 million) and prove experience with at least one contract related to investment, construction, operation or maintenance of infrastructure projects in the last 10 years.

Prequalification is scheduled to open on 2 May and close on 25 May 2018. SENER plan to publish a list of prequalified participants on 27 July. The authority has set a deadline for technical and financial bids: 17 August 2018. The contract for the project will be signed no later than 16 November 2018.

The winner of the tender will be the bidder requesting the lowest constant annual contractual payment (CACP). The Energy Regulatory Commission (CRE) will include the CACP in the electricity transmission tariff and the National Center for Energy Control (CENACE) will pay directly to the contractor, with the resources derived from the transmission rate.

The government announced its intentions to tender the project in April 2017, officially confirming in December that a tender was going to be issued.

The aim of the project is to improve the operation, efficiency and reliability of the Baja California electricity network. Additionally, SENER plan to modernize the network with the application of Smart Grid technologies. The authority also hopes that the project will encourage the installation of renewable energy plants, through reducing the cost of electricity.