Navigating Mexico’s Energy Reform Through DG, Energy Storage

Q: How has Beetmann’s strategy evolved over the past few years in response to changes in the energy sector’s regulatory framework?

A: We witnessed significant political shifts, which mainly resulted in uncertainty regarding the long-term presence of private electricity generation in the country. Consequently, all generation permits granted following the enactment of the Electricity Industry Law experienced a hard stop. In response, we adapted our strategy by focusing our efforts on Isolated Supply with Exempt Generation, where no generation permits are needed.

For the portion of electricity demand that could not be covered through on-site generation, we supplied energy via our Qualified Supply entity through the Wholesale Electricity Market (WEM). Isolated Supply with Exempt Generation, became the model we adopted to navigate the regulatory, political, and market uncertainties.

Q: Do you believe that the 0.2 MW increase for DG will have a significant impact on companies like Beetmann?

A: There are two key changes that directly benefit Beetmann’s business. First, the maximum installed capacity for exempt generation that does not require a generation permit has increased from 500KW to 700KW. This expansion allows the industry to install a larger volume of generation capacity within their own facilities.

Second, the new law introduces a streamlined permitting process for power plants with capacities below 20MW. This expedited process aims to encourage self-supply and facilitate the installation of renewable generation projects intended primarily for self-consumption.

These incentives will enable companies to secure generation permits more quickly, allowing them to meet a greater share of their electricity needs through investments in their own facilities. This, in turn, will significantly reduce their energy costs while allowing them to select preferred energy providers for any remaining supply requirements.

Q: How has your client base evolved and what are the main demands your clients have when considering your solutions?

A: With the launch of the Wholesale Electricity Market (WEM) in 2016, many industrial clients transitioned from Basic Supply (CFE) contracts to Qualified Supply agreements.

The WEM allowed users to gain a deeper understanding of the different components of electricity pricing: energy, capacity, regulated tariffs, market-based rates, and clean energy certificates. Clients became more familiar with these concepts and began to appreciate the value of generating their own electricity.

Today, many industrial users have specialized energy departments that closely monitor and manage their electricity costs. They possess a much deeper knowledge of the electric sector, the Wholesale Electricity Market, on-site generation technologies, contractual timelines, and the terms and risks associated with different types of Power Purchase Agreements (PPAs).

Q: Do you believe that energy management systems can play a significant role in mitigating issues related to grid capacity?

A: Energy optimization has been a long-standing topic within the global electricity sector. There is an extensive track record and numerous case studies across different sectors, industries, and countries that seek to maximize the efficient use of electricity.

Specifically, our software solution, Alux, is designed to optimize not only the energy produced, primarily photovoltaic energy, but also the energy consumed and, thirdly, the energy commercialized within the Wholesale Electricity Market.

With on-site photovoltaic systems, you can closely track how much energy is being produced and ensure that your solar plant is performing according to expected levels based on real-time weather conditions. This is accomplished through the integration of meteorological stations and inverters. With these two hardware components, along with proper data integration, it becomes possible to perfectly monitor whether energy production is truly optimized.

Secondly, in terms of the energy you acquire or commercialize through the wholesale electricity market, it is not just about purchasing orders and receiving invoices. It is also critical to assess price differences between the real-time and day-ahead markets. With this analysis, users can make more informed purchasing decisions based on their location within the country’s load zones.

Third, and arguably most important, is the ability to accurately measure consumption at a granular level. It is one thing to have a main utility meter at the facility entrance, but it is far more valuable to measure energy consumption across the main internal points within an electrical installation.

Q: What are your main objectives and expectations for 2025?

A: Our primary expectation for 2025 is based, first and foremost, on the fact that have a now solid legal foundations regarding what is permitted and what is not under the new Electricity Sector Law. I believe the framework is quite clear in that regard.

What remains pending for all participants in the electricity sector is obtaining a full understanding of the specific regulations, the "fine print", so to speak, particularly concerning timelines, processes, and the exact mechanisms for implementation. While the law's transitory provisions provide some guidance on when we might expect further clarity, there is still anticipation around the release of detailed procedures.

Lastly, an equally important aspect we hope to see this year is the consolidation of nearshoring trends. We currently observe significant international political dynamics, particularly between the United States and China, including ongoing tariff disputes, which inevitably create uncertainty regarding foreign investment in countries neighboring the United States.

Beetmann Energy develops innovative solutions focused on sustainable energy technologies to help companies reduce their environmental impact in terms of electricity consumption and, in turn, provide them with tools that allow them to manage their energy consumption more efficiently and transparently.