Mexico Energy Insights

Perspectives on the energy sector that create value for over 10,000 market participants each month

Tesla's Gigafactory Plans for Mexico

At the beginning of March, Tesla announced plans to construct a new Gigafactory in Mexico, its first outside of the U.S., Germany, and China. The plant will be built in Monterrey, Nuevo León, around a three-hour drive from Texas, providing efficiencies for its supply chain.

We believe that with support from the Jalisco Energy Agency and foreign actors, Jalisco will become a regional green energy hub within the next decade

A Positive Outlook for Renewables in Jalisco

We expect Jalisco to become a regional leader in green energy and environmental action, having already introduced schemes such as the Low Carbon State Program, which encourages reduced fossil fuel consumption and the development of renewable energy operations.

Green Hydrogen in Mexico

State-owned Pemex already produces hydrogen as a by-product of its fossil fuel output, using it mainly for refining and ammonia production processes. Air Liquide, Linde, and Cryo-Infra/Air Products also have hydrogen operations in Mexico. As the country develops its green energy market, it could rapidly expand its hydrogen production to meet the needs of a growing global market.

Guadalajara’s Climate Action Plan

We expect the implementation of Guadalajara’s Climate Action Plan to help the city to reduce pollution and improve the quality of life for its residents, while ultimately supporting the combat of climate change. If successful, we believe the strategy could be replicated in Mexico’s other urban areas, as well as elsewhere in Latin America.

The Adoption of Zero-Carbon Fuels in Mexico

With a burgeoning renewable energy industry and well-established shipping routes, Mexico could quickly become a major international hub for low-carbon freight and transport. This would not only boost the country’s long-term energy security but would ensure its position in the global energy market in the transition to green.

Distributed Generation in Mexico

We expect the development of distributed generation in Mexico to deliver multiple benefits, including reducing greenhouse gas emissions, delivering electricity to rural communities, and decreasing the burden on the national grid system.

Baja California’s once-promising geothermal sector has seen challenges in recent years due to a lack of investment. The Cerro Prieto power plant was commissioned in 1973 when it was named the second largest geothermal facility in the world.

Energy Outlook for Baja California

Baja California’s energy structure is different from the rest of Mexico, as it runs off an independent electric power grid, separate from the country’s main grid system. Despite significant solar and wind potential, the state continues to rely heavily on the importation of natural gas from the U.S.

What discounts are available from renewable energy power purchase agreement in Mexico?

Questions About Qualified Supply

Due to the regulatory environment with respect to new utility-scale projects in Mexico, the large suppliers have been reluctant to put forth aggressive bids at our RFP auctions like in the past. However, we are still seeing discounts of 10% to 50% for new Qualified Users in Mexico.

The Advantages of Nearshoring in Mexico

By bringing manufacturing closer to home through nearshoring in Mexico, North American companies can optimize their operations, mitigate supply chain risks, and better respond to market dynamics. Read more about how renewable energy procurement for nearshoring in Mexico.

as electric vehicle (EV) uptake increases worldwide, we believe Mexico could use its long-standing automotive manufacturing experience to become an EV hub

Electric Vehicles in Mexico

Mexico’s EV market is growing at a steady rate, and we believe its strong automotive manufacturing industry makes it well-positioned to become an EV production hub. In addition, concerns around air pollution and carbon emissions mean that a shift to EV, both for consumer vehicles and public transport, is likely to see robust growth over the next decade.

Mexico is successfully increasing its renewable energy capacity year-on-year, mostly centered around solar and wind power.

Opportunities for Battery Technologies

As Mexico establishes itself as a regional renewable energy hub, we expect battery storage to become an essential means for enhancing the flexibility of its grid system to provide more versatile energy delivery across the country.

Renewable Energy in Mexico City

CDMX is leading the renewable city movement, allocating $17.1 million a year to distributed solar capacity and aiming to add 350 MW by 2024. It also hopes to produce 2.1 million liters of biodiesel per year from residual cooking oil, starting in 2024.

Strong Fundamentals for Energy Storage

Solar power has come a long way in Mexico, with 6,160 MW of cumulative utility-scale solar capacity at the end of 2021. However, the country’s battery storage facilities are still limited, meaning that power generation is not optimized.

Top 7 Factors Driving Solar Lighting

More efficient LED lights, better solar panels, and battery technology all contribute to longer run times. Longer run times do far more than just reduce costs. They also expand potential applications. In remote areas, where conventional grid sources are either expensive or not available, increased run times are crucial.

The Benefits of Solar LED Lighting and the IoT

The Benefits of Solar Lighting and IoT

Solar-powered LED lights and the Internet of Things (IoT) are two different ways to cut expenses and improve energy efficiency. Furthermore, the synergies achieved by combining these two technologies creates far more benefits than either one of them alone.

The Benefits of Utility-Scale Solar in Mexico

The Mexico City Government has big plans to develop the solar footprint of one of the world’s largest cities, introducing the Solar City (Ciudad Solar) initiative in 2019.

Keys to Success for Wind Energy in Mexico

Mexico’s wind energy capacity has rapidly increased over the last decade, putting it in a good position to become a regional leader in wind power. The country’s wind output goes hand-in-hand with a growing solar energy sector, which contributes to Mexico’s steadily expanding renewable energy mix.

An Overview of Renewable Energy in Mexico

Mexico lends itself to renewable energy development thanks to its favorable geographical conditions. The country enjoys around 300 days of sunlight each year, and with over 9,000 km of coastline, there is significant potential for growth across other renewable energy forms.

Strong Fundamentals for Solar Power in Sonora

The state of Sonora in northern Mexico has been identified by the National Autonomous University of Mexico as having the greatest solar potential in the country. If just 1% of Sonora’s land was used for solar projects it could provide enough energy to power all of Mexico.

A climate advocacy NGO called the Mexican Climate Initiative (ICM) developed a solar bond program to use a percentage of the money from the electric subsidy program to invest in solar energy projects.

An Overview of Solar Bonds in Mexico

Recently, a climate advocacy NGO called the Mexican Climate Initiative (ICM) developed a solar bond program to use a percentage of the money from the electric subsidy program to invest in solar energy projects. The funds are used to purchase solar photovoltaic (PV) modules to be installed on the rooftops of residential houses, particularly in heavily subsidized areas.

Reducing Risks in Energy Contracts

In recent years, Mexico has experienced an increase in the number of energy providers, making the market more competitive than before. While many industrial consumers stick to companies they know because of their well-established reputation, regularly surveying the market to see what deals are available may be prudent.

Mexico’s already well-developed solar power industry is expected to grow even further over the next decade.

A Positive Outlook for Solar Power in Mexico

The market is favorable for solar energy projects thanks to low equipment costs, strong renewable energy policies, and several national solar power programs. Solar panels in Mexico cost an average of $3.07 per watt, and we expect this to decrease further as the development of solar becomes more commonplace.

The Benefits of Onsite Solar in Mexico

Onsite generation, also known as distributed generation, has gained popularity in Mexico because of the challenging regulatory climate regarding energy power purchase agreements. Distributed generation in Mexico is classified as any system with a capacity below 500 kWp. Companies can save up to 25% with onsite solar.

Energy procurement options available in Mexico

Frequently Asked Questions

What does a company need to get started with energy procurement in Mexico? We generally only need the location of the facilities and one year of utility bills to analyze the viable energy procurement options for a potential client.

Enectiva has an easy-to-use interface. Lower Operating Expenses With Energy Monitoring and IoT

Lower Operating Expenses With IoT

Mexico Energy Partners helps companies to improve energy efficiency, but that needs to be followed up with continuous monitoring and management. Proper monitoring is the key to ensuring that management's plans are successfully implemented so that energy expenses remain low.

Identifying Risks in Energy Contracts

The number of energy options available to businesses and consumers expanded dramatically over the last several decades, but those new options also created new risks. Energy contract provisions can limit those risks, but market participants must know where to look.

Opportunities in Natural Gas Storage

End users and industrial businesses are sometimes challenged by the lack of pipeline infrastructure that shuts them out of natural gas supplies in Mexico. This is an area for potential growth as either Mexican or foreign investors can seek out opportunities to build out this needed infrastructure.

Challenges Facing Natural Gas Developers in Mexico

Challenges Facing Gas Developers

Though the political environment poses some challenges because of an increase in nationalist rhetoric, the reality of Mexico’s current energy situation could make it difficult for the Administration to roll back reforms as quickly.

Mexico Energy Partners Energy Efficiency

Best Practices for Energy Efficiency

The coronavirus crisis placed many businesses in the unusual position of being able to save significant amounts of money through improved energy efficiency during protracted shutdowns. There are specific best practices that firms can use to determine how much they can save, safely make the changes, and then reverse the process when business starts up again.

Energy Efficiency in Mexico - Mexico Energy Insights blog - Mexico Energy Partners

Opportunities for Energy Efficiency

Specific programs were created to assist firms and households in making the transition to power-saving technology. The Eco-Crédito Empresaria is perhaps the most important for small and medium-sized businesses. This credit helps firms upgrade their equipment to more energy-efficient technology.