Introduction

2021 Introduction

The paradigm shift in Mexico’s energy sector that began ramping up after the administration of President Andrés Manuel López Obrador entered power went into full swing in 2021. The government’s goal is to return state-owned PEMEX and CFE to the forefront of the industry, playing a fundamental role in the country’s energy production and dispatch. To achieve this, the government began taking decisive steps. For Mexico’s private power sector, this policy redirection proved disappointing and unfortunate. Many of the previously successful strategies regarding financing, permitting and project development had to be either adapted or shelved altogether and initiatives to protect investments were put in motion.

The government has also said it is willing to work with the private sector to achieve the country’s ambitious climate goal of 35 percent renewable energy by 2024. To this end, CFE aims to develop further combined cycle power plants, running for the most part on natural gas. To make this a reality, Mexico’s natural gas infrastructure needs to be enhanced. A revamp of hydroelectric capacity is also in the works, and the Program for the Development of the National Electric System 2020-2034 (PRODESEN) continues to acknowledge Mexico’s superb wind and solar capacity due to the country’s geographic location. As a result, smaller distributed solar systems are increasingly popular. However, the lack of improvement in the country’s transmission and distribution system are perhaps the most pressing problem. Newer technologies, such as storage and grid solutions, can play an important role in developing the system and new avenues for public-private partnerships are expected to open up in the near future.

Whatever developments the future may bring, Mexico is already benefiting from an open market driven by continuous innovation. It is a market that has demonstrated it resilience and commitment to the country’s energy sector and its here for the long run. Mexico Energy Review 2021 revisits milestones in innovations while zooming in on new opportunities that are expected to allow Mexico’s electricity market to mature and develop further.