Translating Manuals into Contracts

Despite efforts to strengthen and consolidate the WEM, there is still a widespread lack of understanding over how the new market functions. Myriam Delgado, Director General of Celergy, says the company was established to meet this exact need. “The Energy Reform was created to attract investment into Mexico and stimulate economic growth. How is a company supposed to operate under the WEM scheme if there is not a complete understanding of its procedures?” she asks. Celergy is a Mexican company that provides consulting services to market energy and CELs under the new market scheme. “We are a nonsupplier, commercializing company that acts as a broker through the issuing of bilateral contracts between power producers and final consumers. Our company also provides consulting services regarding the acquisition of CELs and compliance with grid code requirements,” Delgado says.
In January 2016, CENACE started operations with real-time transactions under the new WEM scheme. Three months later, the grid code guideline was published in Mexico’s Official Federal Journal. It obliges every participant in the electricity system to comply with specific technical requirements. Under the Electricity Industry Law, these players are distributors, generators, traders, qualified suppliers and qualified users with active participation in the market. “To be able to operate in the WEM, you need to cover certain requirements demanded by CENACE,” says Delgado. “As a certified user, we operate in the market on a 24/7/365 basis.”
The company’s strategy is to approach companies operating under medium and high-tension voltages, as these must comply with grid code regulation. It provides advice to help these businesses understand this scheme. Additionally, if a company is a candidate to issue CELs or introduce a cogeneration system, Celergy can suggest various options and pre-feasibility studies. “This is an integral trading process and every player benefits,” says Delgado. “The off-taker gains an economic income and the power producer or company with energy surplus can avoid penalties and has profitable inputs as well.”
CRE has strict and defined standards regarding grid code technical requirements but Delgado would like to see more communication from the commission because few companies are aware of the consequences that might arise by not complying with current standards. “The rules of the game should be very clear for every participant,” she says. “My suggestion is to apply guidelines, publications, addendums, agreements and dispositions as these tools are easier to understand and regulate.” By April 2019, these requirements will be mandatory for every market participant with the major sanction being the disconnection of the plant from the NES.
Delgado attributes the accelerated drive toward renewable energy generation in part to the country’s commitments made in the Paris Agreement. But she says the private sector needs some additional incentives to get fully on board with the initiative. While Delgado believes the CELs initiative is a great mechanism to achieve national goals in terms of renewable energy generation, she acknowledges that this tool is undergoing a maturation process as well. “This incentive demands an investment with an ROI of between five and six years,” she says. “2018 was a particularly challenging year as companies had to achieve 5 percent of clean energy consumption.” According to PRODESEN 2018-32, to achieve a 26.7 percent increase of clean energy generation by 2019, CELs consumption will have to increase to 5.8 percent by 2019. The goal is to achieve a clean energy generation target of 31.7 percent by 2022.
Despite being a relatively new company, having been created in 2017, Delgado has high ambitions for its future. “We want to be the No. 1 energy trading company in Mexico,” she says. The company is not only focusing on expanding its own footprint but expanding that of international clean energy companies in Mexico. “Another important objective is to attract international investment to Mexico. Various companies in the US have approached us as they want to know how the energy industry operates here and we are advising them on the governmental and administrative procedures involved when entering the Mexican electricity market,” she says.