Power Production Capacity Will Not Meet National Demand in 2025

During a forum organized by Anahuac University, the Center for Economic Studies of the Private Sector (CEESP) warned that Mexico’s current power generation capacity might not be enough to meet the electricity demand in 2025, as the government’s policy shift toward greater public influence has slowed down investment in the energy sector.

According to CEESP, data shows that the country’s electricity consumption continues to grow, but generation capacity is not keeping up. This is due to diverse factors, including the fact that the Energy Regulatory Commission (CRE) has stopped permits for the development of at least 110 new power plants, mostly based on renewable energy. On the other hand, the thermal power plants announced by CFE will not become operational before 2026.

Carlos Hurtado, Director, CEESP, said that Mexico represents "a world of investment opportunities" for foreign companies. He added that the state should take advantage of the opportunities offered by the trade agreement with the US and Canada, the USMCA, as well as the nearshoring trend.

Hurtado stressed that since 2019, CFE has invested little in transmission and distribution networks. “The lack of investment has resulted in insufficient infrastructure for transmission, distribution and electricity generation," said Hurtado.

Leopoldo Rodríguez, President, the Mexican Association of Wind Energy (AMDEE) estimated that installed renewable energy capacity in Mexico will grow at a rate of 5 percent annually. He stated that in the next five years, the country could double the existing clean energy capacity, mainly composed of wind and photovoltaic solar, which already account for about 15 percent of total installed capacity. However, he agreed that a stable legal framework and security in investments are needed to achieve this.

Juancho Eekhout, President, the Energy Committee of the American Chamber (AmCham) Mexico, stressed that the meaning of energy sovereignty changes per region. It depends on the objectives pursued, the available resources and needs, among many other factors, however, in all cases, infrastructure is fundamental to reaching energy sovereignty.

The experts agreed that in the end, what the country requires is reliable, clean and affordable energy. They added that an ideal situation would be to have a combination of solar, wind, hydropower and natural gas, in addition to the development of clean hydrogen.