How Has Mexico Energy Reform Changed the Market?

In 2013, Mexico’s President, Enrique Peña Nieto, introduced his plans for a new Mexico Energy Market that would include an extensive and ambitious agenda of Mexico Energy Reforms covering a variety of social and economic areas. In only three years, most of these transformations have already been implemented or are under way, and the newly formed Mercado Eléctrico Mayorista is already bearing fruits. While Mexico Energy Reform is impacting many aspects of the market, changes can be seen most prominently in the following areas:

Increased Competition
For the first time in its history, the Mexican power market is opening up for both competition and foreign investment. While this shift in the market is exciting, participants in this newly formed market will need to overcome a few obstacles to keep up with their competition and achieve success.

Investment in New Infrastructure
The investment in new infrastructure to support the market is helping create new industries (many of which are technology and knowledge-based) and lower energy costs. This not only makes energy in Mexico more affordable, but also makes Mexican companies more competitive, creating wealth for the country and jobs for its citizens.

Lower Energy Prices
Mexico Energy Reform was introduced in an effort to reduce the price of electricity, which, according to Renewable Energy Focus, is on average 25 percent higher than electricity prices in the U.S. for residential and commercial users. As new providers begin participating in the market, and competition increases, consumers can expect prices to become more affordable. 

Clean Energy Initiatives
Mexico Energy Reform aims to achieve a more secure, efficient, and sustainable energy supply. In fact, as part of the North American alliance, Mexico, the U.S., and Canada recently unveiled a commitment to see half of North America’s electricity generated from clean sources by 2025. However, without ancillary and grid services (such as flexibility reserves and load following) to mitigate the variability and unpredictability of renewable generation, this shift could lead to system operational problems for both bulk power and distribution operators.

As you can see, Mexico Energy Reform has fundamentally changed the Mexican electricity industry. Ensuring its continued success, and the success of its participants, will require comprehensive Mexico Energy Market Software solutions that give energy providers the opportunity to streamline market operations and maximize their business potential.

About the author:
Dr. Manuel Santos has more than 30 years of experience developing and implementing power system applications, managing projects, providing consulting services, and is currently actively involved in OATI products in Mexico and Latin America. As Senior Vice President of Sales and Product Strategy at OATI, Dr. Santos oversees strategy for new and existing sales accounts, as well as coordinating all existing OATI product roadmaps and identifying new applications needed in the energy industry. His experience includes 13 years with Siemens Power Systems Control and three years with the Mexican Electrical Research Institute (IIE).