Nuevo Leon Energy Cluster Worries About Energy Availability

Cesar Cadena, President, Nuevo Leon Energy Cluster, said energy companies are worried that the state does not have enough power available to meet the energy needs of companies in industrial parks.

According to the Employers Confederation of the Mexican Republic (COPARMEX), the prolific industrial activity and population density of the state make Nuevo Leon a large energy consumer. It is Mexico’s second-largest metropolitan area. COPARMEX’s study pointed out that in 2020, the state’s electricity consumption was 16GW, a 9.4% year-over-year decrease due to the Covid-19 pandemic.

Cadena stressed that Nuevo Leon is an important energy producer. It even provides electricity to nearby states. However, the problem lies in the transmission and distribution services to nodes that require electricity. “A great deal of effort is required to ensure that the nodes can supply electricity to the companies installed in the industrial parks,” Cadena told El Economista.

The nearshoring phenomenon has boosted foreign direct investment (FDI) in Mexico’s northern states due to their proximity to the US border. From October 2021 to October 2022, FDI in Nuevo Leon reached US$4.36 billion, which spurred the creation of 50,191 new jobs. Of this investment, the manufacturing industry accounts for 37.6%, the automotive sector for 19.8%, logistics for 8.9%, furniture for 6.9%, IT and software for 5.9% and other industries for the remaining 20.8%. Iván Rivas, the Minister of Economy of Nuevo Leon, reported that FDI was expected to close with US$4 billion by the end of 2022. 

“We must have enough energy. What is the point in having industrial parks and qualified people to work there if there is no electricity?” Cadena asked.

Cadena stated that the cluster is working on convincing the authorities of the benefits of involving private investment in renewable electricity generation, an issue currently spearheaded by CFE. “It would be relatively easy to modify the matrix, allowing private companies to produce clean energy. All the mechanisms already exist, we just need legal certainty to make this possible,” said Cadena.

Data from CFE revealed that during 2021, the largest share of widely considered to be clean energy sources was natural gas at 43.77% followed by hydroelectricity at 17.22%. Nevertheless, natural gas still causes emissions that net zero manufacturers would need to offset.

Nuevo Leon’s Energy Cluster is a civil association formed by the energy industry, academic institutions and the government of the state of Nuevo Leon, including Cadena. Its goal is to develop the competitiveness of the energy sector in the region.