The energy evolution in Mexico
The energy evolution in Mexico
exico is at a crucial stage in its energy sector, seeking to balance the progress of clean energy with infrastructure and demand challenges. From July 8 to 17, the 2024 UN High-Level Political Forum took place, emphasizing the urgency of implementing concrete measures against climate change. It was noted that despite existing frameworks, global progress in this area still lacks clear direction. Among the main challenges, experts identified financing gaps in energy transition, particularly in developing countries.
The USMCA came into effect on July 1, 2020, so the final decision on the joint review will be announced on July 1, 2026, where the three countries must confirm whether they will continue with the agreement. The key technical aspects of the agreement include definitive deadlines, such as:
In this global context, Mexico has made advances in the implementation of clean energy, with renewable sources representing 31.2% of the total net electricity generation in 2022, up from 22.5% in 2018. This growth has been especially significant in renewable energies, with substantial increases in solar, wind, and hydroelectric generation between 2018 and 2022, according to the Ministry of Energy. Efforts have also been made in the distribution of natural gas through national and international investments to improve pipelines, especially in the southeastern part of the country. However, challenges in energy infrastructure persist, exacerbated by increasing industrial demand and international commitments. To address these challenges, Mexico updated its National Energy Transition Strategy, prioritizing electromobility, energy storage, and technological advances.
New administration and inherited challenges
The election of Claudia Sheinbaum brings a new perspective to these challenges. With a PhD in Energy Engineering and experience as Secretary of the Environment of the Federal District Government and a Member of the Climate Change Expert Panel, Sheinbaum's scientific background could drive innovative approaches to energy policy. However, she also inherits a complicated economic situation and challenges in the energy sector from the previous administration, including regulatory uncertainties that have impacted investor interest.
For example, the Dos Bocas refinery project represents President López Obrador’s effort to increase national energy production and reduce fuel imports. While the goal is to meet the growing energy demands, it diverges from global trends in sustainable energy. Delays and cost overruns of the project raise questions about its efficiency and economic viability. Ultimately, Dos Bocas, now called the Olmeca Refinery, highlights the balance Mexico faces between energy security, environmental concerns, and attracting new foreign investments.
Climate plans and comprehensive strategies
Looking ahead, Sheinbaum's approach to energy policy will be crucial. During her presidential campaign, she presented the "Energy Sovereignty for Sustainable Development" strategy, which consists of six objectives:
- Energy sovereignty: Ensuring Mexico advances in guaranteeing its energy supply with its own resources.
- Energy robustness against external changes: With clear participation of the energy sector in public finances with “reasonable debt.”
- Reducing energy intensity.
- Accessibility: Ensuring the entire population has access to electricity, gas, and/or renewable energy sources for their basic needs.
- Reducing pollutant and greenhouse gas emissions.
- Addressing rural energy needs: Promoting access to clean and safe energy.
To achieve these objectives, the virtual president-elect outlined various actions such as keeping fuel prices stable, strengthening Petróleos Mexicanos (PEMEX) with a long-term plan that includes renewable energy production, and ensuring equitable participation of the Federal Electricity Commission (CFE). Her recent commitment to business leaders suggests the potential for policies that could boost investment and development in the energy sector. She announced that she would present an Energy Plan aimed at strengthening private investment in the energy sector, establishing an energy model with 54% state participation and 46% private participation, focused on the development of renewable sources. Additionally, she announced the opening of new energy generation centers and the implementation of a 25-year plan to promote renewable energies and electromobility.
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The Congress is also promoting the conversation on energy matters and during the most recent forum, “The future of energy in Mexico, advances and challenges towards sustainability”, the Senator and President of the Energy Commission, Rocío Adriana Abreu Artiñano highlighted the progress in the energy transition. She mentioned key projects such as the rehabilitation of refineries, the construction of a photovoltaic park in Sonora and the modernization of hydroelectric plants. The senator emphasized the importance of a competitive and sustainable energy market for Mexico and the attraction of foreign investments.
Desde el Senado de la República se está impulsando la conversación en materia energética y durante el foro más reciente, El futuro de la energía en México, avances y desafíos hacia la sostenibilidad, la Senadora y Presidenta de la Comisión de Energía, Rocío Adriana Abreu Artiñano destacó los avances en la transición energética. Mencionó proyectos clave como la rehabilitación de refinerías, la construcción de un parque fotovoltaico en Sonora y la modernización de centrales hidroeléctricas. La senadora enfatizó la importancia de un mercado energético competitivo y sostenible para México y la atracción de inversiones extranjeras.
In that sense, it will be relevant to observe the direction that energy policies take during the 2024-2030 six-year period, whether they will continue to adhere to the traditional and sovereign vision that has been promoted for years, or if this model will advance to a cleaner matrix through renewable energies that promise long-term sustainable development.
Integration and future perspectives
In the global context of energy transition, Mexico faces the challenge of balancing the advancement of clean energy with infrastructure needs and growing demand. Although the World Economic Forum's Energy Transition Index shows a 10% global improvement in the last decade, the main challenge remains increasing the generation of non-conventional renewable energies and promoting energy efficiency. Mexico, with its geographical advantages and the government’s focus on sustainable development, has key opportunities to modernize its infrastructure, use natural gas as a transition fuel, and align its policies with international frameworks, which could attract foreign investment and improve the country’s energy supply.