The ABC of Industrial Electricity for Entrepreneurs and Business Owners
Everything you need to know about industrial electricity in Mexico. Discover what a Qualified User is and why it's beneficial to be one.
Since 2016, the MEM (Wholesale Electricity Market) has become the transaction hub for various energy products, from energy and power to clean energy certificates and financial transmission rights. This dynamic has diversified options by allowing the entry of different actors under six distinct modalities, each with its own requirements and benefits.
But what does all this mean for entrepreneurs and business owners? At the heart of this new electric market is the figure of the "Qualified User," a unique opportunity to have more control over energy costs and access more competitive rates.
Basic Concepts of the MEM
For entrepreneurs and business owners, understanding the operation and opportunities offered by the MEM is essential. It's not just about understanding how prices are determined or how supply is guaranteed, but envisioning how, through this market, it's possible to access more competitive costs and energy solutions tailored to the current and future needs of businesses.
The MEM is not a physical space or place but an exchange scheme governed by supply and demand where the transactions of buying and selling electricity between generators and marketers occur. Generators are the entities responsible for producing electric energy and can be public or private.
Marketers, on the other hand, are entities that buy energy in the MEM to sell it to end users. They can be suppliers of basic, qualified, or last-resort services.
All these figures have one purpose: to offer competitive options to Qualified Users - large consumers of electric energy who, due to their high consumption, have the option to choose their energy provider in the MEM.
Due to its complexity and size, the MEM is operated by the National Energy Control Center (CENACE), which ensures open and non-discriminatory access to the national transmission network and the general distribution networks.
When a qualified service supplier and a qualified user plan to develop a long-term commercial relationship, it is common to sign a Power Purchase Agreement: an agreement to establish a fixed energy price, protecting the user from market fluctuations and ensuring predictable income for the supplier.
Additionally, the MEM sees the buying and selling of Clean Energy Certificates (CELs): Instruments certifying production from clean sources. Generators obtain them and can sell them to marketers or end-users to meet sustainable consumption goals.
Qualified Users
As mentioned earlier, qualified users are electric energy consumers who, due to their high consumption, can choose between different providers and are open to buying exclusively from official sources.
This category was developed within the Mexican regulatory framework to foster competition in the electric sector. Qualified Users can acquire energy through the Wholesale Electric Market (MEM) or directly from private generators.
A company or entity must meet certain consumption requirements to be considered a qualified user. Up until August 11, 2016, load centers reporting a demand equal to or greater than 2 Megawatts could be included in the Qualified Users Registry. However, on August 12, 2016, this requirement was reduced to 1 megawatt.
Two main categories of load centers can enroll in the Qualified Users Registry:
Load centers required to enroll:
Those that did not receive public electric energy service as of the entry into force of the Electric Industry Law (August 12, 2014) and meet the electric demand requirement.
Load centers with the right but not required to enroll:
These include load centers that, at the time the Electric Industry Law entered into force, already received Public Electric Energy Service (were supplied by CFE) and met the current demand requirement. They also include load centers that were under Legacy Interconnection Contracts at the time the Law entered into force, regardless of their demand level.
It's important to mention that if load centers are required to enroll and do not do so, the CRE has the authority to enroll them ex officio and, additionally, initiate procedures to apply the corresponding sanctions.
Benefits of Being a Qualified User
By negotiating direct bilateral contracts with suppliers, qualified users can obtain lower prices and more favorable conditions in their supply contracts. They can also adapt their energy consumption and production according to market conditions and take advantage of opportunities.
As they can choose their provider, qualified users can opt for cleaner and more sustainable energy sources, allowing them to meet sustainability and corporate social responsibility goals. Finally, by diversifying their supply sources and having long-term contracts, qualified users can reduce their exposure to fluctuations in electricity prices.
What is needed to become a qualified user?
Required demand: more significant than one megawatt (monthly) demand.
Pre-registration: You can pre-register in the OPE, which is a platform of the Energy Regulatory Commission (CRE).
Accreditation: The applicant must accredit the load centers to be included in the registry and ensure that they meet the required demand levels set by the Ministry of Energy.
Contract with CENACE: Those interested in participating in the MEM can do so through the signing of a
Market Participant Contract with CENACE. This contract will specify one of the participation modalities, either as a Generator or a Basic Services Supplier.
It's important to mention that becoming a Qualified User can be done directly by the interested company or through a qualified service supplier.
Being a Qualified User opens doors to more favorable and tailored electric supply conditions for each company's needs. With detailed regulation, having an expert ally is essential. As a qualified service supplier, Enel has knowledge and experience in the Wholesale Electric Market and is committed to offering innovative and sustainable energy solutions aligned with your business's goals and objectives.
Don't wait any longer! If you're considering taking the step towards more efficient energy management and benefiting from the advantages of being a Qualified User, contact us. At Enel, we're ready to guide you through this process and ensure that your company has an optimal and tailored electric supply. Together, let's illuminate your business's future!
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