Mexico: New draft regulation for self-consumption of electric power

The Ministry of Energy has submitted the draft regulation of the National Energy Commission (CNE) with the DACG, which establishes the regulatory framework for electricity generation under the self-consumption scheme, both in isolated and interconnected modalities, requesting an exemption from regulatory impact analysis.

The purpose of these new DACG is to foster the orderly, safe, and efficient development of self-consumption scheme, in their various forms, as well as to establish applicable characteristics, maintain a self-consumption registry, set requirements and formats for updating the registry, and provide a contract template for the sale of surplus self-consumption energy and associated products.

Once published in the Official Gazette of the Federation, these provisions will be mandatory throughout the country and will apply to holders of self-consumption generation permits, power plants, microgrids, self-consumption users, carriers, the National Energy Control Center (CENACE), the State Public Company (CFE), and other participants in the wholesale electricity market (WEM).

The DACG draft provides new elements for interpreting the self-consumption scheme, in both isolated and interconnected modalities, including definitions such as ‘net installed capacity,’ ‘self-consumption surpluses,’ ‘self-consumption shortfalls,’ ‘private network,’ and ‘auxiliary uses,’ among others, which had not been previously defined in the Electricity Sector Law (LSE) and its regulations.

The full DACG file is available (in Spanish) at this link.

Isolated self-consumption

The power plant must not be connected to the National Transmission Network (RNT) or the General Distribution Networks (RGD), as the exclusive purpose of the generated energy is for on-site consumption to meet the needs of the permit holder or self-consumption users connected through a private network.

This permit modality does not require interconnection or connection studies, registration, or representation in the WEM. If consumption centers require additional energy, they may connect to the National Electric System (NES) under certain technical conditions and in accordance with the relevant connection contracts.

There is an option to switch to the interconnected modality by modifying the generation permit and taking the necessary actions.

These power plants must not be synchronized with the NES, so they will not share the electrical characteristics of frequency, magnitude, and phase angle measured in the NES. The DACG also contemplates small electrical systems, such as microgrids, especially in community schemes, to promote energy self-sufficiency in rural or urban communities with limited infrastructure.

Interconnected self-consumption

This model allows the self-consumption power plant to connect to the RNT or RGD, enabling the injection of surplus energy and the purchase of additional energy as needed. Interested parties must submit an interconnection or connection request, carry out the applicable studies, perform the necessary works to meet the specific infrastructure requirements according to the relevant manuals, and sign the corresponding interconnection-connection contract (the format is still pending issuance).

Interconnected permit holders may operate without selling surpluses (for self-consumption only) or with surplus sales (injecting excess energy into the NES), complying with the requirements for each scenario. Surplus self-consumption energy may also be stored in storage systems.

To sell surpluses, the permit holder must sign a contract for the sale of surplus self-consumption energy and associated products (included as an annex in the DACG). In certain cases, representation in the WEM may be required to acquire self-consumption shortfalls and deliver surpluses. Such representation should be carried out through a market participant registered with the physical assets, as established in the DACG.

Only one active interconnection point per private network is allowed, and all operations must take place within national territory.

Self-consumption service conditions and self-consumption registry

The DACG establishes that the service provided to self-consumption users must be formalized through service provision or utilization contracts, or a similar legal instrument, except when the permit holder is the sole self-consumption user.

Additionally, the CNE has 180 days to create the self-consumption registry, aiming to maintain up-to-date information on installations and users participating in self-consumption schemes. The registry will be created upon granting the corresponding permits and will include self-consumption users.

Registered data must be updated within 15 days of any modification or, at the latest, by March 31 of each year. Changes will be made using the forms annexed to the DACG.

Summary of the surplus sale contract model in the interconnected scheme (annex 1 of the DACG)

Parties: The contract is entered into between the State Public Company (CFE, as supplier)and the self-consumption permit holder.

Purpose: Establishes the terms, conditions, and compensation for the sale of surplus energy and associated products (CEL and capacity).

Term: Coincides with the generation permit’s validity.

Notification and Payments: The permit holder must notify in advance the amount of surplus to be injected. Payment is made according to formulas considering the levelized cost of energy and the local marginal price.

Metering Systems: The permit holder must install and maintain the required metering systems for settlement in the WEM.

Termination: The contract may be terminated for breach, expiration of the permit, or sale of surpluses to a participant other than the supplier.

Disputes: Resolved before the CNE in accordance with the LSE and its regulations.