A battery installed at a Mexican industrial site in February 2024 earns its money in one place, which is the demand charge on the CFE bill. It has nothing to sell into the wholesale market. On our read of the Diario Oficial, no CRE resolution and no SENER acuerdo in force at that date established electricity storage as a separate permitted activity with its own product in the mercado eléctrico mayorista.

That narrows the question for a procurement manager or a plant finance director. Storage in Mexico is not a trading asset. It is equipment that changes the shape of a site's demand curve, and the shape of that curve is what CRE's tariff schedules price. The governing instrument is Acuerdo A/058/2017 of 23 November 2017, which set the methodology for the final basic supply tariffs. The schedules themselves took effect on 1 December 2017 under Acuerdo A/061/2017 of 29 November 2017.

So the decision is arithmetic, not strategy. Find the demand peak that set demanda facturable in each of the last twelve billing periods, work out what it would take to cut it, and set that against the installed cost of a system. If the demand charge is a small share of the bill, no battery will fix the bill. What follows is what the rules allowed in February 2024, which charge the battery moves, and what the published cost figures leave out.

What the rules allowed in February 2024

Four instruments defined the space, and none of them was written for storage.

Article 17 of the Ley de la Industria Eléctrica, published in the DOF on 11 August 2014, exempts generation below 0.5 MW from needing a CRE generation permit. It exempts nothing else. A site pairing a battery with a rooftop array below that threshold still signs an interconnection contract with CFE Distribución and still needs municipal construction and land use approvals.

That interconnection runs under the distributed generation rules CRE issued as RES/142/2017, published in the DOF on 7 March 2017. They provide three schemes and no others. Under medición neta, the scheme almost every Mexican distributed generation customer uses, surplus is credited against later consumption and never paid in cash, and credit unused after twelve months is liquidated at the local marginal price. Under facturación neta, injected energy is paid at the local marginal price of the node, well below the retail tariff. Under venta total, everything generated is sold and nothing is self consumed.

A battery that never exports is simply site equipment. Its obligations arrive through the Código de Red, which CRE reissued as RES/550/2021, published in the DOF on 31 December 2021 and in force from 1 January 2022, and which sets what a centro de carga owes the network on power quality.

Market access is a separate question with its own thresholds. Registering as a Usuario Calificado requires 1 MW of maximum demand at a centro de carga over the previous twelve months. Participating directly in the MEM as a market participant requires 5 MW plus 20 GWh a year, under the Manual de Registro y Acreditación de Participantes del Mercado issued by SENER and published in the DOF on 15 July 2016. Crossing either threshold buys access to competitive energy supply. Neither creates a storage product to sell.

The charge a battery actually attacks

Under the tariff structure A/058/2017 established, a site drawing more than 25 kW in medium voltage sits on GDMTO or, with hourly metering, on GDMTH. GDMTH prices energy separately in the base, intermedio and punta windows and sets the capacity charge on maximum demand coincident with punta.

A battery therefore does two things of unequal size. It lowers billed demand if it discharges across the punta window every month without fail, and that is the larger effect. It also moves energy from a cheaper window to a more expensive one, and the gain there is the price difference multiplied by the kilowatt hours moved, less round trip losses. The system supplier must state those losses in the quotation, and the figure to use is the guaranteed one rather than a nameplate one.

What a battery does not do is reduce consumption. It moves kilowatt hours and loses a fraction of them on the way. Any proposal showing site consumption falling is showing efficiency work, and efficiency work should be priced separately and done first. We set out the site level economics in battery storage for industrial plants, and the anatomy of the charge itself in a guide to beating GDMTH demand charges.

Solar, storage and the export question

Consider a plant with a rooftop array and a battery, as an illustration rather than a case study. The array would produce through the middle of the day. Where the plant's own peak sits late in the afternoon, inside the punta window, the array alone would miss it. A battery charged from midday surplus and discharged across punta would move that output to the hour that sets the capacity charge. The value of doing so is set by the plant's own demand profile, and two plants on the same tariff in the same city can reach opposite answers.

The export question matters here. Under medición neta an exported kilowatt hour returns as a credit against later consumption, so exporting midday surplus and drawing it back in the evening is possible on paper. It does nothing for the capacity charge, because the credit offsets energy and not demand. That distinction is the reason a battery exists on such a site at all.

For a buyer with a renewable supply contract, the same logic applies to the contracted volume. Storage moves the hour at which contracted generation is consumed on site, which raises the share consumed rather than exported. We covered the contracting side in corporate power purchase agreements in Mexico.

On carbon, SEMARNAT publishes an annual emission factor for the Sistema Eléctrico Nacional. Energy displaced from the grid carries that factor, and energy lost to round trip inefficiency carries it as well.

What the price headlines cover

BloombergNEF published its annual battery price survey on 26 November 2023. The volume weighted average lithium-ion pack price was USD 139 per kWh in 2023, down 14% from 2022, with China at USD 126 per kWh, United States pack prices 11% above China and European pack prices 20% above China. BloombergNEF forecast USD 133 per kWh for 2024 in real 2023 dollars.

Those are pack prices. An installed stationary system in Mexico is a different number. Enclosure, inverter, protection, switchgear, civil works, controls, commissioning, freight, import duty and IVA all sit on top, and none of them appears in the survey figure. Use the series to judge direction, not to build a budget, and treat a quotation that lands near the pack price as incomplete rather than competitive.

The clean energy target does not create storage demand

Storage cases are often built on Mexico's clean energy target, and the target does not carry the weight. Mexican law's category of energías limpias is broader than renewables. It takes in large hydroelectric, nuclear and efficient cogeneration. The statutory 35% clean energy target for 2024 is therefore not a renewables target, and meeting it does not require storage. A capital committee will find that.

What could make this reading wrong

If CRE issues a storage instrument with a defined market product, a site sized only for demand charge reduction may end up owning an asset that could have earned more. The counter is that a demand charge saving is measurable on the next bill, while market revenue from a rule that has not been written is not. Size for what is billable now and leave headroom in the electrical design.

Second, a site whose peak is set by one unmovable event, a furnace start or a compressor bank coming up together, may need a battery so large that its cost exceeds the saving. That is cheaper to discover in the interval data than in a quotation.

Third, a site on GDMTO rather than GDMTH pays its demand charge on maximum demand recorded in the billing month regardless of the period in which it occurred. The dispatch rule changes, and the prize is usually smaller. Check the tariff on the bill before assuming the punta strategy applies.

What to do before pricing a system

Pull the last twelve CFE bills and record three fields for each month: the tariff, the demanda facturable that was billed, and the energy consumed in each period. That takes an afternoon and it decides whether there is a project.

Then request interval demand data from the meter, or install monitoring if the meter does not provide it. The bill shows the peak. Only the interval data shows how long it lasted and what caused it, and duration is what sets battery size in kilowatt hours rather than kilowatts.

Multiply the achievable demand reduction in kW by the capacity charge on the bill, annualize it, add the energy arbitrage, and compare against an installed cost quotation rather than a pack price. Where the answer is close, try load scheduling first. It costs nothing and it shows how much of the peak was avoidable without hardware.

Size a battery against your own demand profile

Send twelve months of CFE bills, the tariff on the account, interval demand data if the meter provides it, and details of any onsite solar installed or contracted. Mexico Energy Partners will identify the demand peak that set the charge in each month, size the battery capacity needed to reduce it, and return that figure against an installed system cost. Where the demand charge is too small a share of the bill for storage to pay, we will say so before any design work is commissioned.

Request a storage feasibility review

Sources

• Ley de la Industria Eléctrica, Article 17, published in the DOF on 11 August 2014.
• CRE, RES/142/2017 on distributed generation interconnection, published in the DOF on 7 March 2017.
• CRE, RES/550/2021, Código de Red, published in the DOF on 31 December 2021, in force 1 January 2022.
• Comisión Reguladora de Energía, memoria documental "Tarifas Finales del Suministro Básico", 31 October 2018, on Acuerdo A/058/2017 of 23 November 2017, which set the tariff methodology, and Acuerdo A/061/2017 of 29 November 2017, whose schedules took effect on 1 December 2017. gob.mx
• SENER, Manual de Registro y Acreditación de Participantes del Mercado, published in the DOF on 15 July 2016.
• BloombergNEF, "Lithium-Ion Battery Pack Prices Hit Record Low of $139/kWh", 26 November 2023. about.bnef.com