Introduction
In a surprising turn of events, Mexico is witnessing a decline in the participation of clean energy sources in electricity generation, contrary to its commitments under the Paris Agreement on climate change. In the first quarter of 2025, clean energy sources (wind, solar, hydroelectric, nuclear, geothermal, biomass) accounted for only 24% of the total electricity generation, down from 26.4% in the same period of 2021. Out of a total 78,600 GWh (Gigawatt-hours) generated, only 18,900 GWh came from clean energy sources.
Inconsistency with National Development Plan
This development stands in stark contrast to the National Development Plan 2025-2030, which acknowledges (with apparent honesty or cynicism) that clean energy will only reach 21.5% by 2030 (Page 167). The General Law on Climate Change, however, sets a target of 35% clean energy for 2024, a goal evidently not met due to the previous administration’s energy counter-reform.
Regressive Changes in the Electricity Industry
During López’s administration, changes were made to the Electricity Industry Law that prioritized fossil fuel energy generated by CFE, at the expense of clean energy and private investment. Despite various legal challenges, these decisions proved irreversible. In the current administration, to avoid potential legal risks, recent constitutional and secondary legislative reforms have been enacted to solidify the regression in clean energy, restore CFE’s monopoly, and impose formal barriers on private sector participation.
Implications of the New Legislation
The Electricity Industry Law has been abrogated and replaced with the Sector Electricity Law, granting CFE a monopolistic advantage (obliging it to supply at least 54% of the electricity injected into the National Electric System). Private sector participation is now limited to minor, restricted, and subordinated schemes. The Energy Regulatory Commission has been dissolved, with its functions transferred to SENER, now acting as both judge and party. Clean energy targets have vanished, and Clean Energy Certificates, once investment incentives, are now merely a curiosity. The electric market and economic merit dispatching principle, which would favor clean energy plants (more cost-effective), are rendered ineffective as CFE now holds 54% of electricity generation under any circumstances.
Impact on Clean Energy Growth
Under these conditions, it’s unsurprising that Mexico’s clean energy participation in its electricity matrix is declining and moving further away from international commitments. Moreover, restrictions on private investment will hinder the growth of electricity generation capacity with new power plants, as CFE lacks the financial and operational capabilities to meet the required expansion.
Current Power Plant Expansion Projects
Although some CFE power plants in Tula, Tuxpan, Altamira, Mazatlán, and Salamanca are undergoing expansion, they are natural gas combined-cycle plants. This reaffirms the myth of energy sovereignty, as 80% of natural gas is imported from the United States. Another internal combustion “natural gas” plant is under construction in Los Cabos, but the supply method remains unclear due to the absence of gas pipelines and LNG regasification ports. Some solar and wind farms are planned for Sonora, Coahuila, Tamaulipas, and Durango, along with unspecified wind farm locations.
Feasibility of Achieving Clean Energy Targets
Given these circumstances, it’s highly unlikely that CFE can shoulder the majority of costs for an estimated 30 GW (Gigawatts) of power needed to reach 35% clean energy by 2030, along with urgent investments in new transmission and distribution networks and energy storage facilities. This would amount to approximately $40 billion, a near-impossible feat amidst Mexico’s ongoing economic recession since 2024 and deepening in 2025. Furthermore, an impending fiscal crisis due to unsustainable clientelistic subsidies, unproductive mega-projects, embezzlement in Pemex, military business proliferation with public funds, escalating debt and its servicing, burgeoning pension expenses, freezing retirement age for bureaucrats at 56 and 58, and the necessity to reduce the massive fiscal deficit left by the previous administration (nearly 6% of GDP) makes this goal even more unattainable.
Key Questions and Answers
- What is the current situation with clean energy in Mexico’s electricity generation? Clean energy sources’ participation in Mexico’s electricity generation has decreased from 26.4% in early 2021 to 24% in the first quarter of 2025, accounting for only 18,900 GWh out of a total 78,600 GWh.
- How does this align with Mexico’s international commitments? This decline contradicts Mexico’s commitments under the Paris Agreement on climate change, particularly its pledge to increase clean energy’s share in electricity generation.
- What changes have been made to the Electricity Industry Law? The Electricity Industry Law was abrogated and replaced with the Sector Electricity Law, granting CFE a monopolistic advantage and limiting private sector participation.
- What are the implications of these legislative changes for clean energy growth? These reforms have rendered the electric market and economic merit dispatching principle ineffective, hindered private investment, and solidified CFE’s dominance.
- Is it feasible for Mexico to meet its clean energy targets? Given the ongoing economic recession, impending fiscal crisis, and current power generation expansion plans, achieving the 35% clean energy target by 2030 appears highly unlikely.
