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Electricity demand in Mexico: industry and commerce account for 72%

Together, the industrial and commercial sectors account for 72% of Mexico‘s electricity demand, in a context of new energy policies.

According to a report by the U.S. Department of Commerce, industrial manufacturing, operations and commercial activities have been affected by high electricity rates.

In the wholesale electricity market, large industrial and commercial electricity users are officially known as qualified users.

These are companies that require high electricity consumption for their activities. They register with the Energy Regulatory Commission (CRE) to purchase electricity directly as a participant in the wholesale electricity market, or through an electricity supplier (known as a qualified supplier).

Qualified electricity users with a minimum demand of 1MW tend to evaluate different criteria before signing a Power Purchase Agreement (PPA) with their preferred qualified supplier.

Most competitive alternatives offer a tailored package of power, capacity, cost-effectiveness, energy efficiency and clean energy certificates, depending on the needs of the industry or company.

Electricity demand

Since the energy reform (2013-2014), the industrial sector has expressed a strong interest in renewable energy projects.

However, the Department of Commerce refers that the private sector recognizes that challenges remain in successfully developing and participating in these projects, such as permitting delays, transmission constraints, and lack of return on investment.

On May 28, 2020, the CRE approved two resolutions to increase transmission tariffs at legacy PPA generating facilities.

On June 12, 2020, the economic variables to calculate transmission tariffs were officially published in the Official Gazette of the Federation.

The CRE’s resolution was provisionally suspended by an injunction in July 2020.

Meanwhile, the United States initiated this Wednesday the process to raise a dispute settlement panel against Mexico under the USMCA, for certain energy policies, such as alleged preferences in favor of Pemex and CFE.

Even with these challenges, the industrial and commercial sectors are an important area of opportunity for U.S. exports, as they represent the largest percentage of electricity demand. These companies are continuously looking for technological alternatives to increase energy efficiency and reduce costs.

 

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