The new contract model for storage published on March 17, 2026 in the Official Gazette of the Federation (DOF) introduces a structural change in the role of the BESS within the Mexican electricity system , by establishing for the first time a specific contractual scheme for its interconnection and connection to the grid.
"Storage ceases to be a technical appendage without its own contractual figure and becomes a subject of full rights within the national electricity system," stated Javier Gaona , principal BESS Consultant & Software Architect at Power Flow Analytics.
The regulations, issued by the National Energy Commission (CNE) , define a mandatory framework with the Federal Electricity Commission (CFE) as the counterpart and the National Energy Control Center (CENACE) as the technical coordinator, ordering the integration of storage under clear and standardized rules.
This regulatory change directly impacts the perception of risk.
The elimination of contractual ambiguities, historically one of the main obstacles in the sector, is beginning to be reflected in financial conditions.
In that regard, Gaona pointed out that "what does change immediately is bankability, " and projected "a compression of between 150 and 250 basis points in the discount rate , a significant adjustment in a capital-intensive segment. " This change also redefines the nature of the asset, since, according to Gaona, storage ceases to depend exclusively on merchant schemes and begins to position itself as infrastructure, albeit partially, given that the development of the ancillary services market still faces limitations.
But the real turning point is not limited to the cost of financing, but to the possibility of capturing value in new market services.
Until now, much of BESS's technical capabilities could not be translated into structured revenue.
"Previously, injecting energy into the grid existed in a legal gray area that made insurance more expensive, complicated PPAs, and forced the construction of ad hoc structures that consumed time and money.
Without that regulatory support, making revenue stacking services bankable was almost impossible: no financier signs against flows that the contract does not recognize,” Gaona analyzed in dialogue with Energía Estratégica .
He added: "Now the interconnection point is a managed node with measurement, protection and reporting obligations in both directions, which requires greater rigor in the design of the control system, in the selection of the investor and in the coordination with CENACE, and you can document those flows with regulatory support.
This opens the door to arbitrage, frequency regulation, and firm power; services that were previously technically possible but financially unmonetizable. However, the executive stressed that the new regulatory framework does not eliminate all the sector's challenges , especially those related to technical design and the quality of the assumptions on which projects are based.
At that point, Gaona warned that "there is a risk that no contract can resolve and that worries me more than any regulatory uncertainty: the quality of the degradation models .
As he explained, many current projections rely on tools that don't reflect the actual behavior of batteries in operation. Differences between laboratory conditions and real-world environments, such as temperature, humidity, and thermal cycling, can directly impact performance and expected cash flows. He argued that "any model that ignores the nonlinear interaction between internal factors and external conditions deserves to be called a degradation model ," anticipating potential deviations between projected and actual performance over the asset's lifespan. Adding to this technical risk is a key constraint in execution: the supply chain. Even with a clearer contractual framework, the deployment of energy storage faces concrete limitations in critical infrastructure.
"The most severe bottleneck in Mexico today is not regulatory, it is physical," Gaona stated, explaining that power transformers and interconnection equipment have delivery times of between 18 and 36 months , which forces a rethinking of development schedules.
In parallel, he explained that battery manufacturers are prioritizing projects with a higher stage of development, introducing a new competitive logic in the allocation of production capacity. "It's not enough to have a signed contract; you have to have the hardware committed before that contract is signed," he emphasized. Another factor beginning to define the profitability of BESS is nodal analysis , in a system where grid saturation is neither uniform nor constant. " A rigorous analysis doesn't just look for where there's a gap; it looks for where the combination of access, curtailment profile, and price dynamics creates the best return equation ," the specialist maintained, introducing a more sophisticated view of the business. With a projection of up to 5,000 MW of storage by 2030, Mexico is positioned with a strategic opportunity to scale BESS , although its realization will depend on the quality of project execution.
In that regard, Gaona cautioned that the new framework will accelerate deployment , but not automatically. "The complete equation requires the contract, the right node, the secured equipment, and an honest timeline."
The four of them, he summarized.
"Mexico now has the regulatory framework, the market signal and the accumulated knowledge to skip that learning curve.
"What determines whether that possibility materializes is not the contract, but the quality of the decisions made in the next twelve months," the specialist concluded.