Businesses and other organizations use 76% of the energy produced in Mexico, and they are increasingly interested in procuring renewable energy. Over 1,500 firms already use renewables, and capacity keeps rising. Mexico reached over 24,000 MW of sustainable energy capacity in 2019. As the number of market participants rises and the depth of the market increases, renewable power becomes more reliable and cost-effective.

The status of energy auctions in Mexico has become increasingly complicated, but private auctions still promise to help Mexico transition to clean energy. The immediate impact of private auctions will mostly be on existing projects, but they could lead to additional renewable energy development in the future. 

New pipelines have enormous potential to support increased natural gas production in Mexico and also reduce the costs of imports. Although there is already an impressive pipeline infrastructure for transporting natural gas from the U.S. into Mexico, it does not reach the entire country. 

For many years, the market for clean energy was limited by unstable prices. Energy prices are generally difficult to predict, but clean energy adds the uncertainty of new technologies and the weather. 

A power purchase agreement sets out the terms of a bi-lateral agreement in which one organization buys energy from another. The main elements of a power purchase agreement include the price for capacity, the price for energy (basically, the marginal cost of electricity), and the number of years that it will last.

Mexico was the first country to commit to specific targets under the Paris Climate Agreement, and achieving those targets is driving the adoption of solar energy. Mexico agreed to cut greenhouse gas emissions 22% by 2030.

Over the last 20 years, the Mexican natural gas scenario changed dramatically. During the nineties, a decrease in natural gas prices and ongoing improvements in combined cycle technology resulted in a large substitution of oil power stations by natural gas and combined cycle plants. 

Our Energy Efficiency Assessments begin with our consultants analyzing historical energy consumption and identifying trends or ways to optimize energy spending. We meet with building/facility staff and management to discuss the strategy of the facility or plant, which allows us to make thorough recommendations on ways to lower the energy footprint. 

Mexico is committed to expanding geothermal energy as part of its strategies to reach its clean energy targets. Although most geothermal plans are owned by the state’s Federal Electricity Commission (CFE), Mexico has implemented a set of regulations that encourage private developers to participate in the electric market.

The reforms introduced Power Purchase Agreements (PPAs) as one of the main ways to trade energy. A PPA is a mid- or long-term contract to purchase a certain amount of energy to be delivered in the future at a fixed price. 

Mexico has been one of the Latin American countries who has embraced climate change action.  For instance, in March 2015, it submitted a climate action plan to the UN Framework Convention on Climate Change (UNFCCC), being the first developing country to do so.  As a part of its efforts, Mexico has set policies and laws to increase energy efficiency promote clean energy.

Mexico Energy Partners was delighted to have co-sponsored this year’s event, in Norway and Scotland, showcasing Mexico’s energy sector opportunities to private investors.

Mexico’s power grid will have to be expanded and modernized to handle the large amount of renewable projects that will need to be connected to the grid. Mexico’s Minister of Energy said that “over the next 15 years the country aims to build almost 25,000km of new power transmission lines, achieving an investment of at least $13.4 billion.”