May 9, 2024

Energy Regulatory Commission in Mexico Publishes Storage DACGs in CONAMER

Holland & Knight Alert

The Energy Regulatory Commission (Comisión Reguladora de Energía or CRE) in Mexico, on May 6, 2024, published on the web portal of the National Commission for Regulatory Improvement (Comisión Nacional de Mejora Regulatoria or CONAMER), the "Agreement by which the Energy Regulatory Commission issues the General Administrative Provisions for the integration of electrical energy storage systems into the National Electrical System" (Disposiciones Administrativas de Carácter General para la Integración de Sistemas de Almacenamiento de Energía Eléctrica al Sistema Eléctrico Nacional or Storage DACGs).

Objective

The objective of this agreement is to establish the general conditions under which the integration of Electric Energy Storage Systems¹ (Sistemas de Almacenamiento de Energía Eléctrica or SAE) with the National Electric System (Sistema Eléctrico Nacional or SEN) will be carried out. Its purpose is to do so in an orderly and economically viable manner, allowing the variability of intermittent technology power plants and taking advantage of the products and services that SAE can offer, in order to improve the efficiency, quality, reliability, continuity, safety and sustainability of the SEN.

The purpose is also to define the modalities for the integration of SAE with the SEN, outline the general requirements that interested parties must meet for the integration of SAE and participation in any of its modalities and lastly, establish the interconnection/connection procedure that those interested in integrating SAE must follow.

Applicability

The Storage DACGs are of public order, general interest and observance throughout the national territory, so the National Energy Control Center (Centro Nacional de Control de Energía or CENACE), exempt generators, transporters, distributors, entities responsible for loading and end-users will be subject to the Storage DACGs in which they are applicable, and in a non-discriminatory manner with respect to the type of electric energy storage technology used.

Modalities

The integration of the SAE with the SEN will be carried out in one of the following ways:

SAE-CE	SAE-CC	SAE-AA	Non-Associated SAE	SAE-GE
Associated with a Power Plant	Associated with a Load Center	Associated with an Isolated Supply scheme	SAE that will not be integrated into a Power Plant or Load Center²	Associated with an Exempt Generator

Interconnection Studies

Interconnection Requests: They must be made in accordance with the provisions of the Manual for the Interconnection of Power Plants and Connection of Load Centers, and will be applicable to all the aforementioned modalities except SAE-GE, which must comply with the provisions established in the Interconnection Manual of Generation Plants with Capacity less than 0.5 Megawatts (MW).
Interconnection Study: Analysis of the impact on the SEN must be carried out.
Injection Profiles: These profiles must be submitted for at least one calendar year.
Intermittent Power Plants: 1) The injection profiles must include counts per minute for at least one week, for the most critical scenario of estimated randomness; and 2) for those that are in commercial operation, or that have an interconnection agreement and have not entered into commercial operation and request a new study, CENACE may analyze the requirement for an SAE.

Permits

CRE will observe the conditions of the General Administrative Provisions that establish the terms for presenting information related to the corporate purpose, legal, technical and financial capacity, as well as the description of the project and the format of the application for permits for the generation of electric energy. The CRE also will consider: 1) the electric energy generation permit for the modalities that require it, and 2) that the permit holder will be entitled to all the rights and obligations established in the corresponding permits.

In order to begin a process to obtain a permit for electric generation from the new SAE in the modalities that require it, the additional requirements established in the Storage DACGs must be completed.

Relevant Considerations

All the modalities mentioned above must comply with the applicable requirements established in: 1) network code, 2) NOM-001-SEDE-2012, 3) electric installations (utilization) in force or the one that modifies or replaces it, and 4) transporter's and distributor's specifications.

The SAE shall install in a point of interconnection or connection the necessary metering systems for the settlement process of the transactions in the Wholesale Electricity Market (Mercado Eléctrico Mayorista or MEM).

For existing power plants, the integration of an SAE will be considered as a technical modification, so it will have to submit to CENACE the request for the corresponding studies, as well as the modification of the permit before CRE, in accordance with the General Administrative Provisions that establish the terms to request the authorization for the modification or transfer of electric power generation or electricity supply permits.

The Declaration of Entry into Commercial Operation of the SAEs that participate in the MEM must be obtained in accordance with the legislation in force.

Lines of Action

Term	Action
Within a maximum period of one year from entry into force of the Storage DACGs	CENACE: will perform the adjustments to the Interconnection and Connection Request Service System (Solicitudes de Interconexión y Conexión or SIASIC) for the acceptance of Non-Associated SAE studies will perform the modifications to the SIASIC for the SAE-CE that intend to load their SAE from the National Transmission Network (Red Nacional de Transmisión or RNT) or General Distribution Networks (Redes Generales de Distribución or RGD)
Within a maximum period of two years from the entry into force of the Storage DACGs	CENACE: will issue an operational guide that establishes the way in which the SAE, in its various modalities, will be represented in the optimization models of the Short-Term Energy Market (Mercado de Energía de Corto Plazo or MECP) will perform the modifications to the SIASIC for the SAE-CE that intend to load their SAE from the RNT or the RGD will present for CRE authorization a technical specification with methodology for the calculation of the sizing of the SAE for intermittent power plants, which will be applied in the studies carried out by CENACE for the different modalities, will present for CRE authorization, the technical specification with the methodology to determine the required electrotechnical reliability and sufficiency studies will perform adjustments to the mechanisms and systems of the MEM to incorporate the offers of these products in accordance with the provisions of the Electricity Market Bases and will establish the application mechanism for the related services will carry out the modification to the operating procedure for the Declaration of Entry into Commercial Operation of Power Plants and Load Centers to determine the necessary tests for the SAE will determine the mechanisms for the operation and use of the SAE when loading and unloading from the RNT or RGD required to guarantee the planning reserve in terms of the reserve margin and power requirement, and are not exclusively used to compensate for the variability due to the intermittency in the SEN will make modifications to the agreement by which the Market Manual for the Balance of Power is issued for the management and consideration of the SAEs
Following the entry into force of Storage DACGs	CENACE, with the support of the CRE, transporters, distributors and suppliers in the Smart Electrical Grids Program must identify, evaluate, design, establish and implement strategies, actions and projects for the development and integration of advanced electrical energy storage technologies.

Notes

¹ This is the set of components or equipment that allow electrical energy to be extracted from an electrical grid or generation source and stored this energy internally for later use or injection. The SAE may include storage equipment, control and supervision equipment, communications, protections, energy conversion equipment, auxiliary equipment, among others, as appropriate, with the potential to guarantee the electricity supply by complying with the Reserve of Planning in terms of the Reserve Margin and Power Requirement, reduce the intermittency and variability of intermittent power plants to increase operational flexibility, as well as improve the efficiency, quality, reliability, continuity, safety and sustainability of the SEN.

² In this case, its injection and/or consumption into the RNT or the RGD is independently observed and requires a generation permit granted by the CRE.

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