Nuevo Leon Faces Challenges in Energy Transition: México Evalúa

Despite Nuevo Leon’s potential for advancing in the energy transition due to its strategic geographic location, the influx of foreign direct investment (FDI), and the efforts of the local government, it still faces challenges in transmission and distribution infrastructure. México Evalúa, through its research and analysis division El Sextante, published the study 2024 Outlook on Energy Transition in Nuevo Leon, where it examined the state's progress toward a cleaner economy.

The document reviews the performance of Nuevo Leon's energy system, its institutional structure and economic system, and its readiness for the energy transition. To do this, the think tank analyzed 39 indicators related to the transition, covering the period from 2016 to 2024.

During this period, 20.51% of the indicators worsened, highlighting challenges in the energy transition due to economic or structural barriers and insufficient public investment in transmission and distribution infrastructure. This has negatively impacted the attraction of foreign direct investment in the electricity sector. Nonetheless, federal investments in energy have increased significantly, rising from 0.34% to 12.95% between 2016 and 2024, with the federal budget for CFE, PEMEX, and CENAGAS showing substantial allocations.

Nuevo Leon is a net energy producer with growing local consumption, increasing from 12,886GWh in 2015 to 13,632GWh in 2022. The number of energy users also rose by 20.56%, from 2.771  million to 3.341 million. This growth is attributed to the rise in power plants, predominantly funded by private capital. 

Mexico Evalúa highlights Nuevo León as the second state with the highest number of distributed generation interconnection contracts, following Jalisco. According to the 2022 National Survey of Household Income and Expenditures (ENIGH), 99.5% of households in Nuevo Leon were connected to public electricity, with 0.37% accessing electricity by other means and 0.06% using solar panels as the primary source.

Nuevo Leon has implemented policies and programs to promote renewable energy and energy efficiency, including initiatives like the Energy Outlook: Green Hydrogen in NL, the NL Energy Cluster, the Green SME, strategies and projects for energy efficiency in production chains, and the Alliance for Energy Efficiency (ALENER). These efforts involve collaboration among public and private sectors, academia, and civil society, fostering synergies in Nuevo Leon. The creation of the Agency for the Promotion and Utilization of Renewable Energies is also seen as a significant step toward energy transition in the state.

Specialists acknowledge that the incoming government, led by Claudia Sheinbaum, intends to expedite the energy transition, but no specific plans have been disclosed. Therefore, they emphasize the need to increase the use of renewable energy. According to WRI, transitioning to technologies like solar and wind will be crucial to reduce dependence on fossil fuels and diversify the economy, as reported by MBN. This process requires significant investment in infrastructure and technology. The organization warns that strengthening PEMEX and CFE is urgent, but with a focus on promoting sustainability, accelerating technological improvements, and avoiding practices that harm the environment. 

According to Ariel Oyola, Operations Director, AES Mexico, the country has the potential to become a regional and global leader in the energy transition, laying the foundation for a sustainable energy future for generations to come. Continued commitment and effective collaboration among all stakeholders are essential to achieve this goal. Mexico can learn from the experiences of other countries and adapt best practices to achieve a successful and sustainable energy transition.