Mexico Grid Code 2.0

Market Insights :: Whitepapers :: Mexico

Implications of the "Grid Code 2.0" for electricity consumers in Mexico.

Electricity consumers in Mexico are required to comply with the standards set forth in Grid Code 2.0. All users in medium and high-tension supply are subject to this whether they are in "Self-Supply", "Qualified Users in MEM", or still on "Basic Supply" with CFE. This code aims to enhance the efficiency, reliability, continuity, security, and sustainability of the National Electricity Grid (SEN).

Background

When the new Electric Industry Law was published back in 2014, it cited the need to establish the criteria for the efficiency, reliability, continuity, security, and sustainability of the National Electricity Grid (SEN). The Secretary of Energy (SENER) enacted the creation of the independent Regulatory Energy Commission (CRE), the responsible for creating the standards. By April 2016, CRE published what it labeled the "Grid Code".

Initially, companies implemented simple items such as installing capacitors to improve power factor and reduce or eliminate penalties applied if power factor was below 90%. In recent years the simple improvements have been completed and the associated penalties are no longer a motivator for end users.

In December 2021, CRE published the resolution "RES/550/2021" in the official gazette. The document is known as Grid 2.0, and it updates the specifications and rules that consumers need

to comply with. Grid 2.0 establishes a transitionary period for companies to be able to perform all the necessary adequations, and updates the associated penalties.

The transitioning period is coming due on December 31st, 2023. In this document, we summarize its highlights, point out the information that the authority has not clearly defined, and provide a useful set of recommendations to generate a strategy.

The Quality Standards

The technical parameters considered within Grid Code 2.0 are tension, frequency, short circuit, power factor and harmonics, as well as protection, and control systems. In this section, we summarize each of them.

Electric Tension

Given their nominal tension, the load cannot exceed 5% above not it can go below 5%. See the table below for reference.

Frequency

The load should be able to withstand variations in frequency [Hz] and remain connected within the allowed range.

Short Circuit

This parameter refers to the maximum and minimum current in "Amperes" [A] allowed for a "Short Circuit" test. The independent system operator (CENACE) is in charge of publishing the currents for short circuits during the last trimester of each year for the high voltage loads. While "CFE Distribution" is in charge of publishing the currents for the medium voltage loads. Depending on the node the load is connected to, there is a defined Short Circuit current. The value is valid for three years.

Power Factor

This is a proportion of active to reactive power. Loads above 1 MW of demand have to be above 0.95, and the rest of the loads above 0.9 to comply with the standard.

Electrical Harmonics

Establish limits that harmonics cannot surpass for each voltage range (below 69 kV, between 69 to 161 kV, and above 161 kV).

Protections

Comply with the official electrical norm to avoid failures during operation

• Low and high-tension
• Low and high-frequency
• Circuit overload
• Transformer overload
• Backup protections

Control

If and when demand response (DR) is allowed in Mexico, these measures will take place.

Penalties

CRE will be responsible for assessing and collecting penalties under Grid Code 2.0. The document establishes that the penalties, depending on the severity of the issue can be either "two to ten percent of the gross income from the previous year" or "fifty to two hundred times the minimum salary". There are many elements of the potential penalties under Grid Code 2.0 that remain unclear. We also note that under the original Grid Code there were penalties that were never assessed by CRE.

The Strategy Moving Forward

For uses under basic supply, there is a simple way to validate the status of your sites regarding the main parameter, the power factor. On the back of the invoice, there is the historic power factor represented.

This load, for example, at the beginning of 2023 started a decay of the power factor, mainly due to the introduction of an induction motor for their operations, and are being charged the corresponding charge from CFE for a power factor below 90%

The additional charge, or bonification (if above 90%) is calculated by CFE using the following formula:

F.P. being Power Factor

The additional charge can be avoided if capacitors are installed to increase the power factor, and the return on investment is calculated by comparing the cost of the equipment with avoiding the additional charges.

For the rest of the parameters, energy quality studies are required to obtain a site diagnostic. The studies for medium voltage are estimated to cost USD 3,000 for medium voltage loads, while for high voltage loads, they can go up to USD 7,000.

For those companies looking to migrate into the wholesale electricity market, the cost of these studies is included in the adequations needed to obtain a Qualified User status.

In the case that your sites in the country have not reported the need to perform these measurements and carry out the necessary adjustments, getting a quote before the end of the year to consider the investment for the next fiscal year is important.

Additional Notes

This table summarizes the applicable requirements depending on the characteristics of the load:

More: Whitepapers, Electricity, Grid Code

By Arturo Hernández Rodea

Consultant for NUS Consulting Group

More Insights from Arturo Hernández Rodea