qualified user registration and energy procurement process
Our efficient process and strong network with regulators and energy suppliers allows companies to lower energy costs in Mexico’s newly-deregulated energy market. Our consultants manage and monitor the entire RFP process and provide due diligence and risk analysis reports for each PPA proposal. We work directly with your legal team during the final contract negotiations with the selected supplier, and we facilitate the Qualified User and Assets Registration process.
Value creation begins with initial discussions and follow-up calls with executives and plant staff to develop energy procurement strategy for energy consumption
Analysis of regional market data and supplier due diligence
Financial models provided assessing various scenarios to lower energy costs at the plants, with varying risk/return profiles
Presentation of recommendations on energy procurement strategy to key stakeholders
We gather market data and prepare all necessary market analysis to assist in the development of an energy procurement strategy for your organization.
Consultants provide in-depth analysis and recommendations to assist in selecting the supplier of choice.
Our legal team manages the negotiation of the power purchase agreement and Qualified User registration, including the registration of assets.
RFP Process includes:
Procurement of retail supplier to purchase electricity on the wholesale markets
Identify all viable suppliers and perform pre-qualification process
Perform a comprehensive RFP process with high-quality suppliers
Contracting and implementation
Registration of assets and installation of transformers and meters
Regulatory environment
Qualified user process
Energy generation and consumption
Power pricing and auctions
Renewable energy off-takers
Development bank project consulting
PPA Negotiation
Learn More About Energy Procurement in Mexico
Capacity Prices and the Wholesale Electricity Market
The Status of Energy Auctions in Mexico
The status of energy auctions in Mexico has become increasingly complicated, but private auctions still promise to help Mexico transition to clean energy. The immediate impact of private auctions will mostly be on existing projects, but they could lead to additional renewable energy development in the future. Some generators under construction were unable to contract all their energy or received overly low prices at previous auctions.
The Natural Gas Industry in Mexico
New pipelines have enormous potential to support increased natural gas production in Mexico and also reduce the costs of imports. Although there is already an impressive pipeline infrastructure for transporting natural gas from the U.S. into Mexico, it does not reach the entire country. Most of the less expensive piped gas goes only to the northern states of Mexico, in part to provide power for factories.
An Overview of Virtual Power Purchase Agreements
For many years, the market for clean energy was limited by unstable prices. Energy prices are generally difficult to predict, but clean energy adds the uncertainty of new technologies and the weather.
How Risky Are Mexican Bilateral PPAs?
A bilateral power purchase agreement (PPA) has a different risk profile than a contract with Mexico's state-owned electric utility, CFE. As the Mexican economy faces pressure from the coronavirus and lower oil prices, it is crucial to reevaluate risks. In theory, commercial and industrial (C&I) providers are more vulnerable to economic cycles and shocks. CFE provides essential services to many consumers, so it is supported by a much larger revenue base, as well as the Mexican government. We expect that CFE will be able to deliver on its contracts, despite credit rating downgrades throughout Mexico.
Congestion pricing risk might be less of an issue in the short-term due to lower overall electricity usage. Rapid growth in Mexican power consumption often pushes the electrical grid to the limit of its capacity. When that happens, the cost of transferring power across the network rises. CFE always assumes this risk, but bilateral PPAs are more flexible. Temporarily higher electricity transmission fees due to congestion may be assigned to either party in a bilateral PPA, which usually increases risk.
Experienced Consultants and Advisors
Paola Moreno leads the renewable energy practice at Mexico Energy Partners. Paola’s insights create value for clients with challenges related to renewable energy, energy efficiency, and optimizing fuel supplies. Paola has a Master of Science in Technological Systems Management: Energy, Technology, and Policy from Stony Brook University. Paola also has a Bachelor of Science in Electrical Engineering from the National University of Colombia. Paola has special expertise on issues related to climate change, renewable energy technologies, electric markets, and energy policy.
Rodolfo is an attorney and senior advisor with expertise in energy, natural resources, and infrastructure projects. He covers the entire lifecycle of energy projects including bidding applications, M&A, financing, dispute resolution, construction, operation and maintenance, and licensing. He also resolves environmental, compliance, and regulatory concerns. Rodolfo routinely represents clients before the Energy and Environmental Ministry, state regulatory agencies, such as Energy Regulatory Comission and Hidrocarbons Regulatory Comission on matters arising under federal statutes and implementing regulations, including the Energy Reform of 2013.
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