The Electricity Market in Mexico€¦ · 1ra 2da Resume of resulting prices +20diferent companies...
Transcript of The Electricity Market in Mexico€¦ · 1ra 2da Resume of resulting prices +20diferent companies...
TheElectricityMarketinMexicoARecentMarket&RegulatoryDesignforanEraofLowCost
RenewablesandEmpoweredConsumers
MarcelinoMadrigal,Ph.D.*Commissioner
EnergyRegulatoryCommission,Mexico
*The views and opinions expressed in this presentationare strictly of the author/presenter and do not necessarilyreflect the position of the Commission (CRE) as a wholeor other government agency
Panel#3RegulatoryFrameworkandMarketDesign5th GO15&ICERWorkshopMeeting
October 11,Milan,Italy
The Reform and New Industry Structure
3
Mexico’s Power Sector Basic Information
Population 126,000,000
GDP 1,236,249 M/USD
Generation Installed Capacity 2017
75.68 GW
General Information Installed Capacity by Technology, 2017
Electrification Rate 98.58%
Surface
1,964,380 km2Average annual growth rate of
gross consumption, 2013 - 2017
2.6 %297,118
303,316310,350
319,364
329,162
2013 2014 2015 2016 2017
Power generation (GWh)
UsersCFE only supplierBasic User
Regulated UsersBasic Service Supplier
(Suppliers of Regulated Consumers)
Open Access
Transmission Distribution
Commercialization
CFE Generation
Private Generators
System and Market Operation
Final Consumers
Qualified Users
(Requires at least 1 MW demand)Qualified Supplier
(Suppliers only for Qualified Users)
New Model: Competition, Empowered Consumers and Clean Energy Targets
Policy Maker Regulation
Non-Suppliers Traders
(Pure Commercialization)
2018
25%
2021
30%
2024
35%
Clean energy generation targets
Generation
CFE + Private
(Exclusive domain of the State. The State may contract and partner with private entities to performs certain activities)
(Split into 6 subsidiary)
CFE + Private
Design Elements of a Competitive Low Carbon MarketMexico an Example of 2+ Latin America Market Design Wave
6
Wholesale Market Products
Financial Transmission RightsMechanism to hedge exposure to the price differences that may exist between two nodes due to congestion in the transmission network. 1 FTR =1 MWh for every hour in which the FTR is in effect.
Energy and Ancillary Services
Are based on Locational Marginal Pricing for energy (MWh) and zonalpricing for ancillary services (MW).
Clean Energy Certificates
Permanent titles that certify a given source of power generation as being a clean source.1 CEC = 1 MWh produced by clean energy
Capacity “potencia”
The amount of capacity (MW) that a generator can offer in the market is based on its generation availability in the 100 critical hours of the prior year
Market Design: Different Markets and Products
7
Nodal, co-optimized energy and reserve
Day Ahead & Real Time Market
To balance and needs principally acquired in
a long-term market
Capacity Designed as availability in Critical
Hours
Procure 3-year energy contracts
Financial Transmission Rights
One organized, one bulleting (voluntary) at the certificated system
Long-term auctions
Purchase of 15+ year contracts for Energy, Capacity, and Clean Energy Certificates
Financial Transmission Rights
I. Short Term Energy & Reserve Markets
II. Short Term Capacity Market
III. Medium Term Energy Markets
IV. Clean Energy Certificates Market V. Long-term markets
Started in January, 2016
Started in March, 2017
Last results August, 2017
Started in February, 2018
Started 4th Auction, 2018
Long-Term AuctionsAccelerating Clean Energy Deployment
HydroCombinedCycle
Solar Wind
Geothermal
Chih
Coah
BC
NL
Tamps
Oax
SLP
Gto
Ags
Mor
Pue
Son
BCS
Jal
TX
Querétaro
Michoacán
Tlax Yuc
Long Term Auctions are Accelerating Clean Energy Integration at World Record Low Prices
9
Solar
Wind
44.97
55.33
31.22
33.27
1ra 2da
Resume of resulting prices
+20 diferentcompanies
Companies from more than 11 countries, including Mexico
8.9 billion USD of investment in the
coming years
Increase of 7.6 GW to the current generation capacity in Mexico
21.34
18.48
3ra
Num
ber o
f offe
rs 18
9
56
17
16
8
Offers
Winner Offers
Elaboración propia. *Promedio ponderado de ofertas de paquetes que únicamente ofrecieron Energía y CELs. ** El dato de geotérmica corresponde a “3ª subasta de Largo Plazo”, PWc, 2016. Tipo de cambio (MX/USD) utilizado por SLP: 1ra 17.3192, 2da 20.17, 3ra 19.185
Geothermal
Hydro
CombinedCycle
kUSD/MW-yr**
USD/MWh+CEL*
43.70
6.94
36.60
51.90
USD/CEL
Turbogas
Turbogas
1st Auction / 11 companies 2nd Auction / 24 companies
… Increasing the Number of Participants in the Market
3rt Auction / 8 companies
(Compañía de ElectricidadLos Ramones S.A.P.I. de C.V.)
&
11
… with Lower Scales that Point to the Decentralization of Generation
3
15 15
7
4
2
6
8
3 3
1
<30 ≥30 y ≤55 >55 y ≤102 >102 y ≤200 >200 y ≤300 >300 ≥30 y ≤55 >55 y ≤102 >102 y ≤200 >200 y ≤300 <30
Solar Wind Geothermal
WindSolar
Elaboración propia con datos publicados por Cenace, incluye únicamente centrales nuevas
Distributed GenerationEmpowering Consumers and Increasingly Adding Needed Capacity in a Growing Demand Environment
13
Solar Radiation in Mexico Amongst the Best in the World
Mexico has a significant, constant and highly predictable renewable potential: a medium annual irradiation of approximately 5.5 kWh/m2 per day
Sources:SOLARGIS. http://solargis.com/products/maps-and-gis-data/free/download/mexico Mexico Energy Outlook 2016, IEASolar Energy Potential in Mexico´s Northern Borders States, 2012, Wilson CenterWorld Energy Resources: Solar, 2013, WEC
Average solar irradiance range in selected countries
Annual average solar radiation
390 MW
14
DG yet sill limited participation in the mix 0.02% of energy demand in 2017… but growing exponentially
Residential40%
Commercial18%
Small industry
41%
Others1%
Participation by SectorContracts Capacity
Residential74%
Commercial20%
Small industry 5%
Other1%
Forecast 2018-2023
Installed Capacity(MW)
Forecast Capacity (MW)
Contracts
Forecast Contracts
Con
tract
s
3,594 MW
Last year growth +54.70%
Scales becoming attractive both residential, commercial and small industrial consumers
Access formats:
Net MeteringNet BillingWholesale
PerspectivesDemand Response, Distributed Energy Market & Storage
We working on a comprehensive storage regulation…
Yucatán Peak Shaving
30MW; $70M; IRR 9%
Source: Feasibility Study for Large Scale Energy Storage Systems in Brazil, Colombia and Mexico. Project done by Quanta Technology for ISA, under USTDA support
Electric Energy Supply
545 MW (23%)
Ancillary Services 201 MW (9%)
Grid System 631 MW (27%)
End User / Utility Customer
570 MW (24%)
Renewables Integration
386 MW (17%)
475 MW
399 MW
228 MW190 MW 182 MW
TransmissionCongestion
Relief
Electric SupplyCapacity
Demand ChargeManagement
Time-of-use(TOU) Energy
CostManagement
WindGeneration Grid
Integration,short duration
Applications with best potentialMarket potential Sample projects
10 years ahead market size: 1,419 millions of USD2,333 MW 3,841 MWh
17 different applications5 categories
BCS Renewable Integration
10MW; $8M; IRR 23%
BCS Arbitrage
10MW; $25M; IRR 9%
BasicService
Writing rules for demand response at retail and wholesale levels…
WholesaleElectricity
Market DemandResponse
ServiceDemandResponseResource
Market Bases(8 Manuals)
Still pending:Demand
Response Manual
Characteristics:Ø Users Offer (BS)Ø Indirectly ModeledØ Consideration established
by the CRE, based on fee
Characteristics:• Active is registered in WEM• CC directly modeled• Specification Measurement• Telemetry
Not guaranteedGuaranteed
REL
Is involved in:
DAM CBM
RTM HAM
-Energy-Capacity-Ancillary ServicesLack of Capacity
ReliabilityAuctions
Emergency protocol
Administrative Provisions of
General Character
• 3 Controllable Demand Programs
• Electronic Platform• Contract Models• Events defined by
Distributed NodeP
DR by EventReduction in
consumption in price increases
and 100hrs.critical.
1 Schedulable DR Savings when programming consumption
reductions is during peak hours.
2
Steady DR Economic savings by
reducing monthly consumption.
3
Monitor &Approve
18
… and writing a regulatory framework for smart contracts for collective DG
One Contract for different users who share the same power plant with capacity below 0.5 MW in distributed generation, removing the limits of property
1 power plant
1 owner(individual or corporate)
o
Different owners
Different users
Some possible schemes
Different users in different locations and a power plant in location of one user into the same system
Different users and a power plant in same location
Different users in different locationsand the power plant in a different location regard of the users but in the same system
Thanks!@M_Madrigal_M
@CRE_Mexico