Construction Sector’s Growing Energy Demand Contrasts National Industrial Consumption Decline
While the national industrial electricity consumption dropped by -16.12% in 2023, the construction sector showed a contrasting trend by increasing its energy demand by 5.59%, according to an analysis by Coparmex Nuevo León based on data from the National Energy Balance, Secretariat of Energy.
Construction Sector’s Growth and Implications
- The construction sector consumed 122.39 petajoules in 2023, up from 115.91 petajoules in the previous year.
- This growth made the construction sector account for 10% of total industrial electricity consumption in Mexico.
- The growth is likely driven by the dynamism of new nearshoring-related projects.
However, Coparmex Nuevo León is concerned about data from the Instituto Mexicano para la Competitividad (IMCO), which estimates that electricity demand in Mexico will be 13.4% higher by 2030 compared to 2024.
IMCO’s Call for Accelerated Investments in Electric Infrastructure
To absorb this growth and ensure the country’s energy security, IMCO emphasizes the need to accelerate investments in electric sector infrastructure. The IMCO study suggests starting with the planned $40,185 million in generation and transmission infrastructure due to the time required for planning, financing, building, testing, and operating new projects.
Failure to initiate these investments in 2025, due to unclear private sector participation rules or insufficient CFE budgetary resources, could result in a generation deficit of over 48,000 gigawatt-hours (GWh) by 2030, assuming demand growth isn’t accelerated by industrial electrification and electric mobility.
Nearshoring’s Energy Needs for Revival
Roberto Cantú Alanís, president of Coparmex Nuevo León, echoes the urgency for increased electricity infrastructure investment in Mexico. He warns that if nearshoring gains momentum leveraging US trade advantages, it will be crucial to boost energy generation capacity and strengthen transmission and distribution networks.
“We are aware of investment projects that have been halted, at best, due to electricity infrastructure limitations. Mexico cannot afford to lose investments; instead, we need more industrial parks and businesses driving growth and creating development opportunities for Mexican families,” Cantú Alanís emphasized.
Key Questions and Answers
- What is nearshoring? Nearshoring refers to the business practice of relocating operations to companies in nearby countries, usually for cost savings and improved efficiency.
- Why is the construction sector’s energy demand increasing? The growth is likely driven by new nearshoring-related projects, boosting the sector’s electricity consumption.
- What concerns does IMCO have regarding electricity demand? IMCO estimates that Mexico’s electricity demand will be 13.4% higher by 2030 compared to 2024, necessitating accelerated investments in electric infrastructure.
- Why is increased electricity infrastructure investment crucial for nearshoring? Boosting energy generation capacity and strengthening transmission and distribution networks are essential for nearshoring’s revival, ensuring businesses can operate efficiently.
