Optimizing Project Development for Mexico's Energy Infrastructure

Mexico’s quest to attract foreign investment over the past couple of years has been pressured by the country’s ability to supply enough power to incoming investors. Grid saturation and blackouts have undermined the expansion of renewable energy and remain a major concern for companies seeking to relocate or expand operations into the country.

Industrial electrification is a key component of Mexico's strategy to reduce carbon emissions and enhance competitiveness. To ensure that electrification supports both decarbonization targets and industrial growth, it is crucial to develop policies that incentivize the adoption of energy-efficient technologies, promote the use of renewable energy sources, and provide support for industries transitioning to electric-based processes. This may involve offering tax credits, subsidies, or low-interest loans to companies investing in green technologies and infrastructure.

Fernando Tovar, CEO of Mitsui & Co., emphasized that Mexico must think about energy and infrastructure as part of a broader, interconnected system. “One of the things we would like to propose is that when we talk about infrastructure, we should not separate energy, water, and digital connectivity as isolated issues. A modern economy needs all of them, they are complementary and necessary for the success of an integrated system,” he said. His view reflects an emerging consensus that next-generation energy planning cannot occur in silos but must coordinate across industrial, digital, and resource infrastructure.

Optimizing project development for Mexico's next-generation energy infrastructure requires a multifaceted approach that includes providing regulatory certainty, attracting long-term capital, integrating advanced technologies, addressing technical priorities, and supporting industrial electrification. By focusing on these areas, Mexico can build a resilient, sustainable, and competitive energy system that meets the needs of its growing economy and contributes to global environmental goals.

In this context, CFE’s 2025-2030 expansion plan outlines an ambitious investment strategy, allocating US$31.5 billion to bolster generation, transmission, and distribution capacities. This initiative aims to address the growing demand for electricity, particularly in industrial corridors, and to support the country's decarbonization objectives, albeit under a new model for private-public participation where the state holds preference.

Alejandro Villarreal, General Director at Esvicon, noted that ensuring project success requires early and integrated thinking across all dimensions. “Every project, regardless of its sector, must be viewed from multiple perspectives: technical, financial, legal, risk, and business benefit. Ultimately, projects exist to generate value, and they must be designed holistically from the start. Too often, one of these perspectives is missing in the early stages, which later triggers issues in subsequent phases,” he explained.

To attract long-term capital for hybrid or storage-integrated projects, Mexico must provide a stable regulatory environment that assures investors of the viability and profitability of such ventures. This includes clear policies on power purchase agreements (PPAs), feed-in tariffs, and incentives for renewable energy projects. The issuance of green bonds and other sustainable financial instruments can also play a crucial role in mobilizing funds for these projects.

Villarreal added that better coordination among technical, financial, and legal advisors is also vital for public-sector initiatives. “When projects are structured or assessed, especially on the public side, we often see different consultancies working in isolation. Instead of moving together in the same direction toward the project’s overall benefit and bankability, each focuses on its own angle. That lack of alignment can undermine the entire structure,” he said.

With CFE's expansion plan in progress, several technical and planning priorities must be addressed to optimize new generation and transmission capacity. These include enhancing grid connectivity to accommodate the influx of renewable energy sources, upgrading transmission lines to reduce losses and improve efficiency, and expanding substations to meet the increasing demand in urban and industrial areas. Additionally, integrating energy storage solutions can help balance supply and demand, mitigate intermittency issues associated with renewable energy, and improve grid stability.

From a project design perspective, modularity and standardization can reduce risk and cost. Santiago Ramos, Executive Director at SMBC SOFOM, explained that modular systems and global standardization can yield significant advantages. “We’ve seen that standardization enables optimization. If manufacturers and investors focus R&D on fewer, modular equipment types, it creates economies of scale and efficiency. Modular construction, building blocks of 20 MW or more in parallel, also reduces risk and shortens project timelines. If one block faces delays, others can enter partial commercial operation, minimizing exposure and generating earlier returns,” he said.

Ramos also highlighted the role of remote monitoring in maintaining reliability. “Remote energy monitoring helps maximize asset lifespans, extend online availability, and minimize preventive or corrective downtime. Centralized global procurement can also deliver fiscal efficiencies that lower total project cost,” he added.

Integrating advanced technologies like predictive maintenance, digital twins, and smart-grid systems is essential for optimizing the performance and reliability of Mexico's energy infrastructure. Predictive maintenance utilizes data analytics and machine learning to anticipate equipment failures before they occur, reducing downtime and maintenance costs. Digital twins create virtual models of physical assets, allowing for real-time monitoring and simulation of various scenarios to enhance decision-making processes. Smart-grid technologies enable two-way communication between utilities and consumers, facilitating demand response, integration of distributed energy resources, and improved grid management.

Implementing these technologies can lead to more efficient energy use, lower operational costs, and a more resilient energy system, especially when coupled with early-stage alignment between stakeholders, cross-sector planning, and modular construction approaches that mitigate project risk. In the end, Mexico’s energy future depends not only on building more infrastructure, but on building it smarter, faster, and in full coordination with the industries that depend on it.