Efforts to modernize Mexico’s electrical grid began in earnest with the 2010 publication of the country’s National Energy Strategy (NES).
A Top Export Prospect for Mexico
Efforts to modernize Mexico’s electrical grid began in earnest with the 2010 publication of the
country’s National Energy Strategy (NES), which laid the foundation and objectives to carry
out the country’s overall energy reform based on energy security, efficiency, and
sustainability guidelines. Mexico’s Ministry of Energy and its state-owned utility (CFE) envision
the smart grid as an enabler of some of NES’s key lines of action, which include reducing the
percentage of electrical power loss from 2010 levels of 17.5% to internationally accepted
standards of 8% and generating 35% of the country’s electricity from clean sources by the year
Thus far, actions have been focused on the development of a plan and vision for the Mexican
smart grid. Significant progress has been made through initiatives such as CFE’s application of
the U.S Software Engineering Institute’s Smart Grid Maturity Model and the Energy Regulatory
Commission’s membership in the Smart Grid Interoperability Panel founded by the U.S.
National Institute of Standards and Technology (NIST). These are two examples of
collaborations with international organizations that have been crucial to developing Mexico’s
smart grid vision and strategy.
Mexico’s smart grid activities to date have included the implementation of strategic pilot
programs used to evaluate new technologies for their technical, operating and cost-benefit
soundness. The ultimate goal of these pilot project and other research and international
collaboration efforts is to shape a Smart Grid Roadmap ―currently being developed― that will
set a single, integrated global timeline for CFE’s smart grid deployment.
One of the most important challenges to the development of the smart grid market in Mexico
is the absence of a specific legal framework and smart grid mandate, which has contributed
to a prevalence of isolated efforts and a lack of coordination. It should be noted, however,
that in spite of this lack of legal backing, the Mexican Ministry of Energy, the Energy
Regulatory Commission and CFE have had the institutional conviction to move forward with
grid modernization and projects are now conceived and carried out in a more coordinated and
Top US rospects 2: 2 Export P in Mexico 201 Smart Grid
A second challenge lies in CFE’s budgetary constraints. The company has a specific mandate
to procure at the lowest possible cost, which creates difficulties in integrating new
technologies into its congressionally approved annual budget. CFE must convince the
Ministries of Finance (which regulates power fees) and Energy that new technologies will
eventually be more cost effective and improve the quality of service to consumers. At this
stage, CFE also needs to overcome organizational issues that hinder the consolidation of a
coordinated, benchmark evaluation process.
Development of the Mexican smart grid market is mostly driven by the country’s energy
efficiency and renewable energy goals, which include increase grid reliability and efficiency
and integration of clean energy. Taking this into account along with the fact that
modernization is at an early stage, opportunities lie in the promotion of technologies suitable
for CFE pilot programs. The prevention of power loss is a first priority and SMI metering
projects are currently being implemented in different cities, with a major installation of
26,000 smart meters in Mexico City currently in the pipeline.
Integration of clean energy is seen as a midterm objective. Although most of Mexico’s clean
generation is hydroelectric, the country is building up its wind energy capacity with an
investment of US$2.5 billion and 600 Megawatts to be tendered this year. These initiatives
have been complemented by legislative changes that have tempered CFE’s lowest cost
procurement mandate with provisions for the consideration of environmental externalities
and cap removals on the integration of renewable energies into the national grid.
Although CFE has a complete monopoly on transmission and distribution, the firm is only
responsible for 60% of Mexico’s power generation. Since 1992, the market for generation has
been open to heavily regulated but growing private sector participation. It is expected that
deployment of smart grid technologies will substantially increase private power producers,
thus bringing more secondary buyers into the market.
In addition, Mexico’s proximity to and common border with the U.S. incites collaboration on
policy, standards, interoperability, and security thus creating advantages for U.S. firms.
Immediate opportunities lie in distribution, with efficiency and reliability as the primary
concerns. Best products include metering hardware and communications software for data
Opportunities for energy storage and other technologies to integrate power from fluctuating
or weather-dependent sources into the grid will increase in the mid-term (approximately 6
years), although isolated pilot projects may be put in place in the short term.
Top rt 3 US Expo Prospects in Mexico 2012: Smart Grid
Market Entry Strategy
CFE’s procurement process can be either by invitation or by open international tender. The
company is open to new technologies and welcomes commercial presentations, which may
lead to tender invitations or specific technology recommendations. U.S. companies can work
with the U.S. Commercial Service to make initial contact with CFE.
The U.S. Commercial Service can also provide assistance in identifying and reaching out to
local potential joint-venture partners for U.S. firms. Foreign companies often form
consortiums with Mexican vendors to compete in CFE tenders, benefitting from their partners’
For More Information
Please contact Commercial Officer Everett Wakai at Everett.Wakai@trade.gov, Commercial Specialist Jesús
González at email@example.com or Commercial Assistant Teresa Verthein at Teresa.Verthein@trade.gov
at the U.S. Commercial Service in Mexico. You can also visit our website at http://www.export.gov/mexico.
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of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help
U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist
in the U.S. nearest you by visiting http://www.export.gov/eac.
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International copyright, U.S. Department of Commerce, 2012. All rights reserved outside of the United States.