As informed in our newsletter of May 9, 2024, on May 6, 2024, the Energy Regulatory Commission (“CRE”) sent to the National Commission for Regulatory Improvement (“CONAMER”) the draft of the ruling whereby the CRE would issue the General Administrative Provisions for the integration of Electric Energy Storage Systems into the National Electric System (the “Energy Storage GAPs”). Following a long approval process in CONAMER, several modifications and various months of waiting, on March 7, 2025, the CRE published the Ruling No. A/113/2024 in the Federal Register, which establishes the GAPs. The purpose of this new regulation is to establish the modalities and general conditions under which the integration of Electric Energy Storage Systems ("ESS") to the National Electric System ("NES") will be carried out in an orderly and economically viable manner, allowing counteracting the variability of intermittent power plants and taking advantage of the products and services that the ESS may offer to improve the efficiency, quality, reliability, continuity, safety and sustainability of the NES.

The main aspects of these new GAPs are as follows:

Definition of ESS

ESS are defined as the set of components or equipment that allow extracting electric energy from an electric grid or other energy source and storing it internally for its later use or injection, which may offer energy, power and associated products with the purpose of increasing operational flexibility and contributing to improve the efficiency, quality, reliability, continuity, safety and sustainability of the NES.

Permits and Applicable Regulations

Although the ESS do not constitute a new permitted activity under the Electricity Industry Law ("EIL"), whenever there is the possibility of injecting electric energy into the National Transmission Grid ("NTG") or the General Distribution Grids ("GDG"), the ESS shall be part of a generation permit and will be subject to the rights and obligations established in the EIL, the generation permits, the Electricity Market Bases, the Grid Code and other applicable norms and regulations, like any other power plant and/or load center.

In the case of power plants and load centers included in a Legacy Interconnection Contract, in order to install an ESS in any of its modalities, they shall migrate completely to the EIL regime, considering as a technical modification the incorporation of the ESS, in accordance with the provisions of paragraphs 3.10 and 3.11 of the Manual for the Interconnection of Power Plants and Connection of Load Centers ("MIP") and other applicable provisions.

Modalities

The GAPs contemplate the following modalities for the ESS:

• ESS-PP (Electric Energy Storage System associated to a Power Plant): Modality in which an ESS is integrated to an existing or new intermittent power plant, sharing the same interconnection point. The Power Plant and the ESS are represented by the same Market Participant. Under the ESS-PP modality, the ESS-EG sub-modality is established, corresponding to the ESS associated to exempt generators, who may install ESS subject to the provisions and regulations applicable to distributed generation and distributed clean generation. Except in the case of ESS-EG, this modality requires a generation permit from the CRE.
• ESS-LC (Electric Energy Storage System associated to a Load Center): The ESS-LC is integrated to load center, existing or new, without including a power plant, and they share the same interconnection point without injecting energy to the NES. The energy stored in the ESS-LC modality will be used to meet the demand of the load center itself and associated equipment within the facilities of the ESS-LC set. The set may receive the energy supply for its ESS and load center through a supplier or participate in the MEM as a qualified user (in both cases, without the need to obtain a generation permit). The ESS-LC that participates in the MEM will not receive any consideration associated with the use of the ESS's electric energy, since it will not be able to deliver it to the NTG or the GDG.
  The load center connected at medium or high voltage that installs an ESS shall notify the CRE, for statistical purposes, within 90 (ninety) business days after the installation.
• ESS-IS (Electric Energy Storage System associated to an Isolated Supply scheme): This type of ESS is associated to an isolated supply scheme (i.e., a power plant whose generation is intended for isolated supply for the satisfaction of own needs, or for the import or export of electric energy under the isolated supply modality. It requires a generation permit or authorization from the CRE.
• Non-Associated ESS: Battery-based ESS that is not integrated to a power plant or load center, with independent injection and/or consumption to the NTG or to the GDG. It is interconnected to the NTG or to the GDG at an interconnection point established based on the studies carried out by CENACE, independently. It requires a generation permit from the CRE. The Non-Associated ESS shall be registered as a firm power plant and be represented in the MEM by a market participant under the generator modality; however, for purposes of accrediting power, the Non-Associated ESS will only be considered as firm power plants if they have the conditions to deliver the available energy of the ESS in a uniform manner for a period of at least three consecutive hours or according to the Availability of Physical Delivery value ("APD") (considering the available energy of the ESS) that was requested for evaluation in the interconnection studies, considering the degradation of the ESS. If such conditions are not met, the Non-Associated ESS will only be able to accredit power under the criteria applicable to intermittent power plant units.

Interconnection with the NES

The ESS, in any of their modalities, shall be installed considering the same point of interconnection or existing connection of the power plant or the load center to which they are associated, as applicable, or the point of interconnection/connection determined in the studies performed by CENACE, in accordance with the provisions of the MIP.

The interconnection for the ESS-PP, ESS-IS and Non-Associated ESS modalities shall be carried out in accordance with the provisions established for power plants in the MIP. In the case of ESS-EG, their interconnection shall be governed by the regulation applicable to distributed generation and distributed clean generation power plants.

For existing intermittent power plants with a valid permit, the integration of an ESS will be considered a technical modification, the corresponding interconnection studies shall be requested before CENACE, and their generation permit shall be modified. Additionally, the GAPs establish specific requirements applicable to requests for studies and requests for interconnection and connection of ESS.

Sale and Purchase Offers

The ESS may participate in the Wholesale Electricity Market with offers for the purchase and sale of energy, power and associated products, in accordance with the rules for each of the different modalities established in the GAPs, the Market Rules and other applicable regulations. However, until the Market Rules are adjusted to detail the technical requirements, allocation, dispatch and settlement of the ESS that wish to provide ancillary services included in the MEM, the participation of these in the Short-Term Energy Market will be limited to the delivery or withdrawal of energy, and the delivery of power in the Power Balancing Market.

Clean Energy Certificates

Clean power plants eligible to receive Clean Energy Certificates ("CECs") that associate an ESS may not receive additional CECs for the stored electric energy, so they shall demonstrate to the CRE the electric energy produced from clean energies without considering the stored energy.

With respect to obligated participants that are associated to an ESS in any of the other modalities, the corresponding CEC obligations will not be increased; therefore, they shall demonstrate to the CRE that the requirements related to the obligations in such matter do not include the load of the ESS.

Non-Associated ESSs will have no rights or obligations regarding CECs, i.e., these ESSs will not receive CECs and, similarly, will not be subject to the obligations of accrediting CECs to cover the requirements corresponding to their electricity consumption, since the stored electricity was generated at another point, where, if applicable, they already received the CECs attributable to their clean energy.

Transitory Provisions

The GAPs became effective on the business day following their publication in the DOF, i.e., March 10, 2025.

The ESSs associated with power plants or load centers that at the date of entry into force of the GAPs are already installed or in commercial operation at the date of entry into force of the GAPs, will have the option to modify their generation permit in accordance with the provisions of the GAPs, or notify the CRE of the existence of the ESS.

The transitory provisions of the GAPs establish different terms (between 180 days and one year from their entry into force) for the CRE and CENACE to modify, update or issue the different model contracts, regulatory instruments and systems that will be applicable to the ESS. Pending the adjustments, modifications and issuance of such regulatory instruments, the ESS will be able to offer their products and services and be settled under the current conditions of CENACE for power plants and load centers, as applicable. Additionally, CENACE shall update in the National Catalogue of Regulations, Procedures and Services (CNRTyS) the Application for Registration of Market Participants and any other that is indispensable so that private parties, on a transitory basis and until the required actions and measures are completed, have the means to apply the GAPs.

The full text of the ruling can be found here.