Where Do MEM Savings Come From?

The Sources of Savings in the Wholesale Electricity Market

When a company becomes a Qualified User and migrates to the Wholesale Electricity Market (MEM), the most frequent question is: where exactly do the savings come from? The answer involves multiple components that, when managed comprehensively, can generate significant reductions in energy costs.

The Three Main Components of the Electricity Cost

To understand the sources of savings, you first need to grasp the three main components that make up the total energy cost for a Qualified User:

1. Energy

The energy component represents the cost of the megawatt-hours (MWh) consumed. In the MEM, energy prices are set in the spot market (Real-Time Market and Day-Ahead Market) based on the local marginal costs of generation.

Contracting energy through a Qualified Supplier —instead of staying on the regulated tariff, a comparison we develop here— provides access to financial products that protect the user from spot market volatility. The main types of products available are:

Natural gas-indexed products: They offer prices linked to the cost of natural gas, the dominant fuel in electricity generation in Mexico. These products provide transparency and traceability in price formation.
Local marginal price (LMP) products: They allow the user to be directly exposed to market prices with the possibility of capturing low prices, though with greater volatility.
Fixed-price products: They provide budgetary certainty by fixing the price per MWh for a given period, eliminating exposure to market fluctuations.
Hybrid products: They combine elements of the above to balance risk and opportunity according to the user's profile.

2. Power

The power component reflects the cost of the generation capacity reserved to meet the system's peak demand. Each Qualified User has a power payment obligation based on its demand coincident with the system peak.

Optimizing this component requires a detailed analysis of the user's load profile and the implementation of demand management strategies that may include:

Shifting loads outside the system's peak hours
Implementing energy storage systems
Active management of production processes to reduce coincident demand

3. Clean Energy Certificates (CELs) and IRECs

Clean Energy Certificates (CELs) are instruments that certify the generation of one MWh from clean sources. Qualified Users are required to acquire CELs equivalent to a percentage of their consumption, set by SENER.

Additionally, International Renewable Energy Certificates (IRECs) offer an alternative to demonstrate a commitment to sustainability and comply with international emissions reporting standards, particularly useful for companies with global operations and ESG commitments.

Efficient management of CELs and IRECs can generate significant savings, especially when negotiated as part of a comprehensive supply package that includes energy and power.

Evaluation of More Than 50 Qualified Suppliers

At Enerlogix, we continuously evaluate the offers of more than 50 Qualified Suppliers registered with the CRE. This continuous evaluation process allows us to:

Identify the best price and service conditions in the market
Compare tariff structures and contractual conditions
Negotiate favorable terms for our clients
Ensure suppliers meet the required service standards

Not all suppliers offer the same products or the same conditions. Some specialize in large industrial consumers, others in specific consumption profiles, and still others offer innovative solutions such as contracts with renewable components.

Risk Management: The Key to Sustainable Savings

MEM savings are not automatic. Without active energy management in the MEM, exposure to market volatility can quickly erode the advantages gained. At Enerlogix we work with more than 12 active suppliers to diversify our clients' portfolio and mitigate risks.

The risk management strategies we implement include:

Supplier diversification: Not concentrating all supply with a single provider reduces exposure to credit and operational risks.
Staggered hedging: Contracting energy volumes at different points in time to average prices and reduce timing risk.
Continuous monitoring: Real-time tracking of market conditions to identify optimization opportunities.
Scenario analysis: Periodic evaluation of different price and regulatory scenarios to adjust the strategy.

How Much Can You Really Save?

"With the right advisory and active management of the energy portfolio, savings can exceed 35% versus CFE's regulated tariff. However, it is essential to understand that these savings depend on multiple factors: the user's consumption profile, market conditions, the contract structure, and the quality of management."

Typical savings for a well-advised Qualified User are distributed approximately as follows:

15-25% comes from optimizing the energy component
5-10% comes from efficient management of the power component
3-5% comes from optimization in the acquisition of CELs
2-5% additional comes from energy efficiency strategies and demand management

That said, that is the gross saving; to understand how much remains net after fees, guarantees, and transition costs, review how much you really save as a Qualified User.

Grounded in a real case: a Bajío company with three Load Centers and 82,000 MWh annually —with greater risk appetite but no certainty about which contract suited it— combined these sources in a tailored scheme of energy and power blocks and achieved MX$72 million in savings in 2024 (see the Bajío Multi-site case).

Enerlogix's Comprehensive Approach

At Enerlogix we don't just chase the lowest energy price. Our comprehensive approach considers all components of the electricity cost and manages them in a coordinated way to maximize total savings. This includes:

Initial diagnosis: Complete analysis of the consumption profile, billing history, and current contractual conditions.
Strategy design: Development of a customized strategy that considers the savings objectives, risk appetite, and sustainability commitments of the client.
Tender and negotiation: Management of the tender process with multiple suppliers to obtain the best conditions.
Implementation and follow-up: Support throughout the entire term of the contract with periodic reports and optimization recommendations.

If your company is already a Qualified User or is evaluating migration to the MEM, learn about our service for Qualified Users or contact us for a free evaluation of your savings potential. Our team of experts will help you design the optimal strategy for your operation.

Frequently asked questions

From three components of the electricity cost that are managed in a coordinated way: energy (the MWh consumed, bought at the market's marginal price), power (the capacity reserved for the system's peak demand), and Clean Energy Certificates or CELs. Added to this are efficiency and demand management strategies. Together, they enable meaningful reductions versus CFE's regulated tariff.

With the right advisory and active portfolio management, savings can exceed 35% versus CFE's regulated tariff. The typical distribution is: 15 to 25% from optimizing the energy component, 5 to 10% from power management, 3 to 5% from the acquisition of CELs, and 2 to 5% additional from efficiency and demand management. The result depends on the consumption profile and the quality of management.

Through a Qualified Supplier there are four main types: natural gas-indexed products, which link the price to the dominant fuel of generation in Mexico; local marginal price or LMP products, which expose you directly to the market with the possibility of capturing low prices; fixed-price products, which give budgetary certainty for a period; and hybrid products, which combine the above according to the user's profile.

No. Savings are not automatic: without adequate risk management, exposure to spot market volatility can quickly erode the advantages gained. That is why strategies such as supplier diversification, staggered hedging to average prices, continuous market monitoring, and periodic analysis of price and regulatory scenarios are applied.

Clean Energy Certificates or CELs certify the generation of one MWh from clean sources, and Qualified Users are required to acquire a percentage according to their consumption, defined by SENER. IRECs are an alternative to demonstrate a commitment to sustainability and comply with international emissions reporting standards, especially useful for companies with global operations and ESG commitments.