Renewable Energy to Power 23% of Mexico by 2026

According to Oliver Probst, Researcher, Tecnológico de Monterrey, lest there are significant changes in the country's energy policy, the installed capacity of large-scale solar photovoltaic and wind energy, as well as distributed generation, will account for 23% of the national capacity within the next two years. Probst shared his forecasts for 2026 across these three technologies, during the webinar titled Clean Energy and Carbon Emissions in the Mexican Electric Sector, organized by the Mexican Wind Energy Association (AMDEE). 

For wind energy, Probst expects that capacity will reach 8,34MW by 2026. Although the sector saw a peak near 1,200MW of new capacity in 2019, installations dropped significantly in 2021 and 2022 due to the current administration's policies. Nonetheless, there has been a consistent trend of "logistic growth" in installations since 2010.

For large-scale solar energy, Probst forecasts a capacity of 7,846MW will be reached by 2026, representing a 5% increase from the 7,469MW reported by PRODESEN. This follows a trend observed in 2019 when the sector reached nearly 1,800MW of new capacity, although new installations fell to under 600MW in 2021 and around 230MW by the end of the study period.

In the realm of distributed generation, the installed capacity is expected to reach 4,506MW by 2026, marking a 34.8% increase from the 3,341MW recorded in 2023. This sector continues to grow without significant restrictions affecting its development.

Combined, these three segments are projected to total approximately 20,691MW, accounting for around 23% of the national capacity, assuming no major changes in energy policy.

Hector Treviño, Executive Director, AMDEE, emphasizes that there is a need to build more electric power plants, including hydroelectric, photovoltaic, and wind, as well as combined cycle and gas turbine plants to meet peak demands that exceed generation and can respond immediately. In his opinion, electricity generation using diesel, fuel oil, and especially coal, which are even more polluting sources, should not be considered anymore.

"During 2023, CFE injected 35,824GWh of clean energy into the grid, a reduction of 13,755GWh compared to 2022, primarily due to the dry season that impacted hydroelectric generation," according to CFE’s annual report. The share of renewables in total generation, excluding nuclear, decreased from 27.7% to 16.42%. However, the rise in photovoltaic generation, which increased from 7GWh in 2022 to 217.81GWh the following year, resulted in its share of clean generation climbing from just 0.01% to 0.15% 

For 2024 to 2026, it is anticipated that CFE will add 8,392MW of new capacity, encompassing both fossil and renewable sources. Of this total, 7,699MW will be from fossil sources, while only 693MW will come from clean energy. In contrast, the private sector is expected to add 3,581MW of new renewable capacity, with negligible increases in fossil capacity. This means that, during this period, the private sector will contribute more clean energy than the state.

President-elect Claudia Sheinbaum unveiled in her Shared Prosperity plan an investment of MX$55.4 billion for transmission projects through 2025. This investment will be made from October 2024 to December 2025, with the goal of completing 44 projects to strengthen transmission lines, resulting in a capacity of 8,548MVA.

Sheinbaum stated that her vision is for a strong CFE, while also encouraging private investment in the electricity sector. "We envision a 54% state participation and 46% private participation, with clear rules governing mechanisms, such as self-generation, primarily linked to the development of renewable energy sources." Sheinbaum also emphasized her commitment to the energy transition, promoting clean photovoltaic, wind, hydroelectric, geothermal, and hydrogen projects. Additionally, she plans to encourage the installation of solar panels and water heaters in homes and businesses.