Improve energy efficiency in your company through Electrical power.
Electrical power, often misinterpreted or overlooked, is a strategic resource in the Wholesale Electricity Market that plays a crucial role in energy efficiency and, therefore, in the profitability of any business.
From the Power acquisition to its sale, through the associated obligations and responsibilities, each aspect of the WEM directly impacts how companies operate and thrive.
In this article, we will break down the details of Electrical Power within the WEM framework, illustrating how proper management can bring tangible benefits to your company.
Concept of Electrical power
When we talk about electricity, we expect to hear the term "power," but did you know that there is a crucial difference between "Power" with a capital P and "power" with a lowercase p?
Electrical power (with a lowercase p) refers to a generating plant's capacity to produce and supply electrical energy at a given time. It indicates the maximum amount of electricity a plant can generate at a specific time.
The Power (with a capital P) refers to an associated product that Generators offer for sale. This commercialization of Power ensures that the electrical system will always have the generation capacity necessary to satisfy the electricity demand.
In the WEM context, by committing to delivering power, the generators assume responsibility for ensuring the availability of energy production in the short-term energy market for the future.
To summarize, while "Power" is a commercial guarantee of energy availability in the WEM, "power" is a technical measure of a power plant's generating capacity. Both concepts are fundamental to understanding the functioning and structure of the electricity market in Mexico and guaranteeing an efficient and reliable electricity supply.
Obligations and responsibilities in the WEM
Within the Mexican Wholesale Electricity Market (WEM), Qualified Users and Suppliers have certain obligations and responsibilities related to Electrical Power:
Power purchase obligations:
Qualified Users and Suppliers (both Qualified and Basic Services) are required to acquire a specific amount of Power, which is determined by the Energy Regulatory Commission (CRE).
Acquisition methods:
Power can be acquired in various ways:
Medium—and long-term auctions allow users to purchase Power in advance, ensuring its future availability.
Direct contracts: Users can enter bilateral agreements with generators to purchase power directly.
Power balance market: It is where power is traded to ensure that there is always enough generation capacity available to meet the country's electricity demand.
Qualified User Responsibilities:
In the Electricity Market, each "Market Participant" has a specific responsibility known as a "Net Power Obligation," which can be viewed as a formal commitment to how much energy they intend to purchase.
To protect the market's integrity, each participant must have financial backing, called a "Guaranteed Payment Amount," which guarantees and ensures that the participant has the necessary funds to support its purchase commitments.
If a participant does not have an adequate Guaranteed Payment Amount, CENACE (Centro Nacional de Control de Energía), the entity that supervises market operations, will not allow him to carry out the purchase. If a participant fails to meet its Net Power Obligation, the CRE (Comisión Reguladora de Energía), the regulatory authority, may impose sanctions.
In essence, to maintain an efficient and reliable electricity market, it is crucial that each participant backs its commitments with adequate financial guarantees and meets its established obligations.
Benefits of correct management of electrical power
Although electrical power may seem like a technical and distant concept, it is directly relevant to the business world, especially for those who operate within the Mexican wholesale Electricity Market (WEM).
Cost efficient:
In the WEM, price signals are established to respond to the shortage or surplus of generation capacity. These signals can directly influence the costs of purchasing or selling electrical power. For a company, this means optimizing expenses and maximizing profits.
Infrastructure development:
Price signals in the WEM encourage the development of new-generation capacity. This is especially relevant for entrepreneurs investing in energy infrastructure, as they can identify investment and growth opportunities.
Safety and reliability:
Adequate power management guarantees that the National Electrical System can satisfy the electrical demand of end users in conditions of sufficiency and safety. For a business owner, this translates into confidence that power failures will not interrupt their operation.
Obligations and responsibilities:
Entrepreneurs who participate in the WEM have specific obligations related to Electrical Power, such as acquiring a certain amount of power each year. Understanding these obligations is essential to avoid penalties, comply with regulations, and ensure the efficient operation of your businesses.
Informed decision making:
Being informed about electrical power and its management in the WEM allows entrepreneurs to make more informed decisions about acquiring energy, investing in infrastructure, or complying with obligations.
Electrical power is not just a technical term; It is a strategic tool that can drive efficiency, reduce costs, and ensure the continuity of your operations. Every decision counts in the dynamic Wholesale Electricity Market, and being well-informed is essential.
Are you looking for an ally on this journey? ENEL is more than a supplier; it is an expert on the subject and a strategic partner. Our experience and knowledge will help you navigate the world of Electrical Power, ensuring that your company is always one step ahead.
Don't let the complexity of the electricity market discourage you. With ENEL, you can turn electrical power to your competitive advantage. Contact us today and discover how we can enhance the future of your business together!
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