Mexican Electricity Wholesale Market Report 2020

01 January 2021
Veronica Irastorza and José Antonio Peñuelas

NERA Associate Director Veronica Irastorza and Senior Analyst José Antonio Peñuelas recently published the “Mexican Electricity Wholesale Market Report 2020,” which provides an outlook on conditions in the Mexican wholesale electricity market (Mercado Eléctrico Mayorista, or MEM).

Since initiating its activity in 2016, MEM has endured many changes. In 2020, electricity consumption dropped 2.5% as a result of the COVID-19 pandemic. This is the largest observed decrease in decades. The last time Mexican electricity demand shrank was in 2009, as a result of the financial crisis, and at that time it only decreased by 1%. In 2020, wholesale market prices were 52% lower as a result of drop in demand, lower fuel prices, new efficient capacity, an increased out-of-merit dispatch, and higher penetration of renewables. During 2020, several government decrees and regulations aimed at reducing private generation were issued but have not yet been implemented.