Energy Storage Shortage To Drive Up Prices in Mexico’s Balancing Market Through 2030
May 30, 2026
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Marvin Gareiss, an analyst at Aurora Energy Research, states that Mexico's power system is currently experiencing a period of capacity shortage. This situation is expected to keep prices in the electricity balancing market elevated over the coming years, thereby creating favorable signals for the development of bess battery system solutions. He notes that batteries are poised to play an increasingly vital role within Mexico's power system; however, regulatory uncertainties-particularly regarding definitions for capacity, ancillary services, and remuneration mechanisms-remain significant obstacles to the growth of energy storage.
Gareiss reveals that the Mexican government is currently analyzing international precedents to refine its regulatory framework and facilitate the participation of energy storage systems in the advanced battery energy storage system market. He points out that the government recently mandated that approximately 30% of generation capacity in renewable energy tenders be co-located with energy storage. This initiative aims to mitigate the intermittency inherent in solar PV and wind power generation, thereby enhancing overall system stability.
Many stakeholders have also raised the question are battery energy storage systems safe, with experts emphasizing that modern designs incorporate multiple layers of protection. Additionally, the use of battery energy storage system container formats has become popular due to their modular deployment and enhanced safety features. BLOO POWER, a key player in the sector, has successfully implemented several such containerized projects across Latin America.
Gareiss argues that batteries hold immense potential for providing system capacity, noting that their construction timelines are significantly shorter than those of gas-fired power plants. Nevertheless, if batteries were to participate solely in the wholesale market, they would be economically unviable due to the low levels of intraday price volatility currently observed. He projects that Mexico's capacity shortage-and the accompanying high prices-will persist into the early 2030s. This forecast aligns with the government's strategic plan to add 12 GW of renewable energy capacity (paired with storage) and 3.8 GW of gas-fired generation capacity by 2030. At present, the market remains in anticipation of concrete regulatory definitions regarding commercial models for energy storage, its eligibility within the balancing market, and the remuneration structures for ancillary services.
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