ICIS Completes First Forward Pricing Survey of Mexico's Power Market

09 May 2017

ICIS has published the first survey of price expectations for some of the key demand centres of the Mexican power market, adding greater transparency to this rapidly emerging energy market.

The results, published in the ICIS Mexico Energy Report, give a market consensus of participants' pricing expectations in Mexico for power delivered to the most important demand centres on the national SIN power grid, including Mexico City, Monterrey and the Bajio.

Mexico's electricity market operator CENACE operates the short-term electricity market, specifying power prices across 108 different nodes on the electricity grid based on supply and demand within each zone. ICIS surveyed expectations for the long-term average of these prices, enabling more visibility for buyers and sellers in assessing price levels for longer-term contracts.

ICIS has focused on Mexico City, Monterrey and the Bajio as centres with high demand. Power to be delivered from 1 April over the next year to Mexico City is expected to transact around Mexican Pesos (Ps) 974/MWh (US$51.38/MWh), based on the midpoint of the bids and offers collected in the survey, and assuming both buyers and sellers make equal concessions to secure a deal. Other hubs were slightly less expensive, demonstrating the different factors influencing price formation such as lower transmission congestion charges and greater access to US-sourced natural gas.

"This is an important first step towards the creation of reference prices for longer-term delivery in the Mexican power market," said James Fowler, editor of the ICIS Mexico Energy Report.

"We would like to thank all those who participated in the survey, and we look forward to continuing to work with the market to boost transparency and liquidity across the Mexican energy sector," he added.

Through the survey, participants were asked to submit bids and offers in Ps/MWh for the purchase or supply of 5MW of power to one of the three nodes for a one-year period beginning 1 April 2017. Responses were submitted to represent the full local marginal price, inclusive of the costs of energy, congestion and losses.

ICIS intends to repeat the survey on a regular basis, providing further transparency to promote trading confidence for the Mexican power market.

To read more about the initial survey and results, click here

The ICIS Mexico Energy Report provides exclusive news and in-depth analysis on the latest projects, prices and legislation affecting the Mexican energy sector. The report is the first English-language publication to provide the insight that global businesses and investors need to evaluate opportunities in Mexico's emerging power and gas markets.

For further information about this release, please contact:

Amy Holland
Marketing Manager, ICIS
Email: amy.holland@icis.com
Direct: +1(713)525-2673

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ICIS is the world's largest petrochemical market information provider and publishes benchmarks that are widely used in the energy and fertilizer markets. Our aim is to give participants in global commodities markets a competitive advantage by delivering trusted pricing data, high-value news, analysis and independent consulting, enabling our customers to make better-informed trading and planning decisions. We have more than 30 years' experience in providing pricing information, news, analysis and consulting to buyers, sellers and analysts.

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