Yucatan Energy Infrastructure Requires US$30 Billion Investment

The Yucatan Peninsula faces a crucial need for over US$30 billion in investment within the next three to five years to enhance its energy distribution networks. Jaime Salazar Figueroa, Director, Expo Electrica Internacional, emphasizes the importance of reinforcing the electrical infrastructure to meet the escalating demands fueled by investments in hotels, restaurants, and overall infrastructure development. 

The success of the region's energy supply is integral to maximizing the potential of the nearshoring trend, as highlighted by former US Treasurer Rosario Marín. Salazar anticipates a 15% surge in energy demand in the Yucatan Peninsula over the next five years, primarily catalyzed by the transformative impact of the Tren Maya project. 

Salazar underscores the current absence of private investment conditions and expresses hope that the winner of the upcoming 2024 elections recognizes the private sector's intention to collaborate, rather than replace CFE. He raises concerns, however, about the lack of clear plans from presidential candidates regarding the country's electrification for the next six years, creating uncertainty within the sector.

The Tren Maya's economic impact is already evident, prompting real estate and industrial investments, particularly along the Cancun-Riviera Maya corridor. The surge in demand for energy is estimated to require a substantial increase in energy production. However, doubts persist about CFE's capacity to address this surge with its existing resources.

This potential shortfall opens a window of opportunity for private entities to bridge the electricity supply gap. Salazar suggests that private investments in photovoltaic plants or wind parks could play a pivotal role in ensuring a reliable energy supply. CFE has initiated projects to expand the electrical grid and enhance supply capabilities in anticipation of the economic boom expected from the Tren Maya.

"For every percentage point of GDP growth, 800km/y of transmission lines must be developed," stated ICC Mexico, emphasizing the need for infrastructure development in combined cycle plants and renewable energy facilities, particularly those based on solar and wind power. The organization cautions that Mexico needs nearly US$114 billion in electricity investments to sustain its current annual growth rate of 2.4%.

CFE aims to conduct two major tenders before President Andrés Manuel López Obrador's term concludes in October 2024. These tenders, focused on the Yucatan peninsula and the northeastern states of Sinaloa, Nayarit, and Sonora, are expected to result in the construction of over 4,000km of transmission lines. Despite being crucial for the country's growth, these projects were initially scheduled for completion two to three years ago. Authorities are now expediting the process, urging interested companies to comply with tight schedules, highlighted Salvador Portillo Arellano, President, CANAME.

Recently, CFE orchestrated a comprehensive roadshow, extending invitations to key contractors, manufacturers, and suppliers to showcase five transmission projects earmarked for tendering in the Yucatan Peninsula. Among these projects, an interconnection endeavor labeled "I19 Contests 1, 2, and 3" aims to bridge the northeast and center of the country.

The Yucatan Peninsula projects are zeroing on amplifying transmission capacity in the Cancun and Riviera Maya II (Leona Vicario) regions, financed through the Deferred Long-Term Expense Payment (Pidiregas) scheme. Moreover, CFE proposed augmenting transmission capacity through the I19 Contests 1, 2, and 3 as part of the Pidiregas initiative.