Mexico (2014)

Degree of reliance on imported energy: 

Mexico has been a very small net exporter of electricity to the United States since 2006.
Power sales from Mexico to California more than offset exports from Texas to Mexico in
2010, though preliminary 2012 data suggest that Mexico has begun to import more electricity from the United States. Electricity sales from Mexico to the United States could increase in the mid-term, as the Department of Energy recently issued a Presidential permit to a subsidiary of Sempra International for construction, operation, maintenance, and connection of a 230,000-volt transmission line across the U.S.-Mexico border. When completed, the transmission line will supply electricity from a Mexican wind farm to the California market. Mexico also exports smaller amounts of electricity to Belize and

Despite its status as one of the world's largest crude oil exporters, Mexico is a net importer
of refined petroleum products. According to PEMEX, Mexico imported 680,000 bbl/d of
refined petroleum products in 2011, of which 60 percent was gasoline and most of the rest
was diesel and liquefied petroleum gases (LPG). Mexico is the destination for most U.S.
exports of motor gasoline, which now stand at a historically high level, and exports to Mexico
accounted for almost 60 percent of the overall growth in total U.S. motor gasoline exports
between 2007 and 2011.

Mexico's net imports of refined petroleum products have increased on average over the past
few years, as resumed economic growth has led to a slight increase in domestic consumption and refinery runs have been insufficient to meet local needs. Nonetheless, Mexico still exported 180,000 bbl/d of refined petroleum products in 2011.

Main sources of Energy: 

Total installed electricity capacity (2012) : 52,500 MW
Thermal: 62.4%
Hydro: 21.9%
Nuclear: 3.1%
Renewables (other than hydro): 4.2%
Undefined: 8.3%

Total primary energy supply (2010):
Crude Oil: 56%
Natural Gas: 29%
Coal and Peat: 5%
Renewables (Geothermal, Solar etc.): 5%
Nuclear: 1%
Hydro-electric: 4%

Total electricity generation (2011): 257.9 TWh

Total electricity generation (2009): 261.0 TWh
Natural Gas: 53.1%
Oil: 17.6%
Coal and Peat: 11.3%
Hydro-electric: 10.2%
Nuclear: 4.1%
Geothermal: 2.5%
Biofuels: 1.0%
Wind: 0.2%

Mexico has a single nuclear power plant, the 1,400 MW nuclear reactor, “Laguna Verde” which is operated by CFE. The general trend in thermal generation is a decline in petroleum-based fuels and a growth in natural gas and coal. Given that Mexico is a net importer of natural gas, higher levels of natural gas consumption (i.e. for power generation) are likely to depend upon higher imports from either the United States or via liquefied natural gas.

The national consumption of electricity reached 201.1 TWh in 2009. The residential sector took 49.21 TWh. The commercial and public services sector demand rose to 21.40 TWh/year, or 10.6% of the total electricity consumption of the country. Industry is the main consumer and can be divided into large industries and medium-sized businesses. The latter are authorized to produce their electricity supply. Of the government installed power plants, 58.2% were thermal plants and 28.8% hydraulic.

In 2008 primary energy production was 10,522 PJ, oil-generated (89.9%), hydraulic energy (4.4%), biomass (3.3%) and coal (2.4%). Mexico’s primary energy structure is made up of coal, oil (crude and condensed), natural gas, nuclear energy, hydraulic, geothermic wind and biomass (bagasse of sugar cane, wood and forest waste). The main secondary energies are coke and the liquid gases from oil, gasoline, naphtha, kerosene, diesel, gasoil, dry gas and electricity.

The state company Petroleos Mexicanos (PEMEX) is the sole producer of the oil and gas resources largely found in the sea of the Gulf of Mexico and the coastal land areas adjacent to the Gulf. Only the deposits, where 68% of the known resources lie, are being exploited. Between 2000 and 2004, the average annual oil production (crude, naphtha and condensed) was more than 3000 barrels a day. From 2005 onwards there was a slight reduction in crude oil production and in 2008 it was down to 2,793 barrels a day, an 8.3% drop on that recorded in the previous year. At the current rate of production the known reserves of crude oil will be exhausted in 9.2 years and those of natural gas in 9.7 years time



Extent of the network: 

National electrification rate (2008): 97% 

More than 3 million inhabitants, living for the most part in areas difficult to access, still lack electricity.

Capacity concerns: 

High growth in demand for electricity is narrowing the gap with available power supply, and the various stopgap measures adopted to attract investment (and delay closure of old plants), are running out of steam. Even budgets to maintain old plants have been slashed. Although it is difficult to assess, the competitiveness of the country is probably harmed, perhaps substantially, by the continued gridlock.

Potential for Renewable Energy: 

Mexico has an abundance of renewable energy (RE) sources such as geothermal, wind, hydro, solar, biomass and biogas. Newest efforts for reaching Mexico’s RE targets focus almost exclusively on wind power. Key legislation has allowed for the generation of wind power through a model called “self-supply”. Despite few existing financing mechanisms and incentives, and a state-owned utility that controls the market and presently offers an energy purchasing price that makes RE power non-viable, self-supply wind parks have served as a key catalyst to build capacity and provide financing models for Mexico’s first Independent Power Producer (IPP) project and future RE power projects.

The hydropower generation capacity in Mexico is managed by both private and public sectors. In 2012, CFE reported 11,603 MW of installed capacity among its 72 stations in operation; this included hydroelectric stations with 30 MW or below. The private sector has 28 stations located in nine states with a total installed capacity of 308 MW. Although the full potential for this form of energy generation has not been completely estimated, the National Commission for the Efficient Use of Energy (CONAE) has already identified over 100 possible sites for its exploitation. For example, in the states of Veracruz and Puebla, it is estimated that there is a potential for the generation of 3570 GWh/year equivalent to an average installed capacity of 400 MW. 

Wind energy
The installed capacity of wind power farms in operation reached about 1,215 MW. Only 7% is operated by the Federal Commission of Electricity (CFE), and the rest is operated through licensees under self-sufficiency, small producers and dependent producer contracts. The self-supply scheme allows companies to generate electricity for self-consumption by establishing a body/entity whose main purpose is to satisfy all the energy requirements of its partners.  The main wind power generation system is in the south-east of Mexico (La Venta-Oaxaca). This system is connected to the national interconnected grid system with a power capacity of 84.6 MW, and a capacity factor of nearly 40% during 2008. It is planned to add 591 MW through private generators. Mexico has a wind energy potential of 71,000 MW, although only 1.7% of this potential is currently in use. There are different zones with wind energy potential and:
A) Isthmus of Tehuantepec (Oaxaca): it is the location of the majority of Mexico´s wind parks. They have a capacity of 1,174 MW in operation and there are also seven projects under construction, with a total estimated capacity of 1,248 MW. It is estimated that this region has a potential of more than 40,000 MW due to the excellent wind conditions.
B) The State of Baja California has a wind potential that exceeds 5000 MW. There are currently three projects under construction with a total installed capacity of 102 MW in the Rumorosa region. Unfortunately, the project development schedule in this area has been delayed by legal uncertainty in land lease contracts between private developers and communal land owners in the area.
C) The coast of the Gulf of Mexico: It is formed by the bay of Campeche and the states of Tamaulipas and Veracruz where a 161 MW project is planned to be built in.
D) The Northern and Central Region comprised by the states of Nuevo León, Coahuila, Chihuahua and Sonora have lower capacity factors in the range of 20–30%. Nuevo Leon has installed 274 MW for power generation and San Luis Potosi has a wind power station under construction with an expected capacity of 200 MW.
E) The coast of the Yucatan Peninsula: it has wind potential because of its excellent wind flows on the coast of Quintana Roo and the island of Cozumel.

Solar energy
Mexico is one of the top five most attractive countries in the world to invest in photovoltaic (PV) solar power projects, only behind China and Singapore. The potential of solar energy in Mexico is one of the highest in the world. This is because the country is located in the so called “solar belt” with radiation exceeding 5 KWh per square meter per day. Furthermore, Mexico has the largest PV module manufacturing base in Latin America. Within Mexico, the solar energy potential is highly accumulated in the north-western part of the country. The annual global solar radiation in Mexico goes from 5.6 to 6.1 KWh/m2-day. In comparison, despite the recent significant growth in solar energy production in the European Union, the potential of solar energy in Europe is far lower.

Geothermal energy
Mexico has a significant development on geothermal generation and is ranked fourth in geothermal power generation worldwide. The state of Baja California has the largest share in this technology. Present installed geothermal-electric capacity in Mexico is 958 MW, although the effective or running capacity is 883 MW because two old 37.5-MW power units in Cerro Prieto were decommissioned in 2011. The Cerro Prieto plant accounts for close to the three quarters of total installed capacity in Mexico. Due to the high investment needed for geothermal exploration, the potential of this RES in Mexico has not been fully evaluated. Considering recent estimates of the geothermal electric potential in Mexico, it is possible to conclude that it can be defined as 2310 MW from high- and intermediate-temperature hydrothermal resources and at least 5250 MW from high- and intermediate-temperature

Tidal power
The Autonomous University of Mexico (UNAM) has calculated that in the Sea of Cortes (peninsula of Baja California), it would be possible to obtain a high generation of electricity from tidal energy due to the sea currents in the Canal of Infiernillo and to the hydrothermal vents (faults of distension in the sea bed). At the moment, the country has no electrical plants or projects under development of any kind to make use of tidal energy.

Biomass energy
There were 59 reported operating projects for co-generation and power supply in 2012. Biomass power has installed capacity of 548 MW in operation, 40 MW are from biogas and the rest from sugar cane bagasse biomass. A potential production of bioenergy is estimated between 2635 and 3771 PJ/year in Mexico, where 77.9% would come from solid biomass such as Eucalyptus plantations, agroindustrial waste and crop residues, 20.1% from liquid bioenergetics (from sugarcane, Jatropha curcas and palm oil) and 2% from biogas (from municipal solid waste and cattle manure). It is important to point out that these estimations were based on suitable lands for each plantation and excluded those (a) used for agriculture, (b) covered by forests, jungles and other natural hedges, (c) belong to conservation areas and (d) non arable because they have a slope higher than 4–12%.

Potential for Energy Efficiency: 

The energy-intensity for Mexico in 2004 was fairly average with 11 MJ/US$2000. The energy consumption for transport and buildings per capita was 16 and 9 GJ/capita in 2004 respectively. The potential for EE improvement is especially large for buildings: 43% in 2030. This is a savings potential of 700 PJ in 2030 in comparison to reference energy demand. The estimated energy savings potential for road transport is 39% (or 1500 PJ) in 2030, and for fossil-fired power generation 20% (or 900 PJ) in 2030. By implementing CHP, energy savings are estimated to be possible of around 400 PJ in 2030. In 2009, total primary energy consumption per capita was 1.63 ktoe, with electricity consumption per capita reaching 2,026 kWh.

With the adoption of the Law on Sustainable Energy Use (Ley Para el Aprovechamiento Sustentable de la Energía) in 2008 and its implementing Regulation (Reglamento de la Ley para el Aprovechamiento Sustentable de la Energía) in 2009, Mexico has also now approved broad-based EE labelling requirements as well as the outline of a voluntary product certification programme. Although the catalogue of products covered by the new EE labeling requirements has not yet been developed, it will undoubtedly include many, if not all, electronics.

In November 2009, the government adopted an energy savings programme (PRONASE), for the period 2009-2012. It estimates the energy savings potential at 2% in 2012 and 18% in 2030, compared with a reference scenario. The plan identifies seven priorities: road transport vehicles, lighting, household appliances, cogeneration, electric motors, energy efficiency standards for new buildings, and water distribution.


Electricity market
Mexico's electricity sector is controlled by the state-owned company Comisión Federal de Electricidad (CFE,, which generates and sells electricity across the whole country after the other state-owned utility Luz y Fuerza del Centro (LYFC), responsible for producing and selling electricity only in Mexico City's metropolitan area, was closed down by the Government on October 11, 2009. The tasks of LYFC were absorbed by CFE.

Private sector involvement is limited and began in the late 1990s, when CFE developed an Independent Power Producer (IPP) scheme, whereby private companies build and operate plants and sell 100% of the generated power back to CFE. Another scheme is the Self-Consumption Scheme, in which IPPs are allowed to generate energy for their own consumption, with the possibility of selling any excess capacity to CFE or to clients outside Mexico. Currently, many international companies are now participating as IPPs: Mitsubishi, Intergen, AEC, Iberdrola, Transalta, Union Fenosa, etc. Between 1997 and 2009, CRE had awarded 22 permits for Independent Power Producers (IPP), a total of 13 GW.

All the major hydro-electric facilities are owned and operated by CFE. CFE also operates 15 plants in the 20 to 60 MW range, accounting for a capacity of 685 MW, and 37 plants under 20 MW, with a capacity of 285 MW. The only privately owned hydro-electric plant is the 6 MW El Plantanal, operated by SKF Sverige AB.

Oil and natural gas market
The state-owned oil company Petróleos Mexicanos (PEMEX, retains exclusive rights to oil exploration and production on Mexican soil. Foreign participation in the upstream sector is limited to service and performance contract arrangements and turnkey drilling contracts. PEMEX holds a monopoly on natural gas exploration and production. However, there is some private participation in ancillary services that support PEMEX operations. The government opened the downstream natural gas sector to private operators in 1995, though no single company may participate in more than one industry function (transportation, storage, or distribution). It also created the Energy Regulatory Commission (CRE) to monitor the sector. CRE has awarded permits for natural gas distribution to Gas Natural, Tractebel, Gaz de France, Sempra Energy, Kinder Morgan, TXUEnergy, Grupo Diavaz, and Grupo Imperial.

Structure / extent of competition: 

The 1992 reform of the Power Public Services Law carried out a partial liberalization of the Mexican electricity sector. It modified the regulatory framework in order to favour new investors. The reform permitted the private sector to generate electricity under six new modalities, and stipulated that electricity generated under these six modalities would not be considered as a public service avoiding thus a contradiction with Constitutional Article 27, which concedes the Mexican Nation exclusive title to generate electricity. The modalities defined by the Power Public Services Law are: self-supply, cogeneration, small production, independent production, export, and import.

In 2006 the private sector participation had increased from 30.4% to 35%. The increments for each modality were: independent production 22.8%; self-supply 6%; cogeneration 3%; and export 2.7%. Control over activities of transmission, transformation and distribution of electricity were kept by the Comision Federal de Electricidad and Luz y Fuerza del Centro that are both state-owned companies. As of mid-2012, private generators (known as Productores Independientes Energia (PIE)), held about 12.2 GW of generating capacity, mainly in the form of combined-cycle gas turbines.

Existence of an energy framework and programmes to promote sustainable energy: 

The National Development Plan 2007–2012 sets the rational and sustainable use of natural resources and the progressive diminution of greenhouse effect gas emissions as a priority goal. The energy policy of Mexico aims to secure supply of energy, to diversify primary energy sources, reducing their environmental impact and to improve the efficiency and competitiveness of public companies. The installation of the most developed RE (hydraulic, biomass, wind and sun) in the shortest possible time is considered essential to obtain these goals.

The National Development Plan 2013-2018 is currently being drafted by the government. Key points will include establishing indicators to measure the effectiveness of the government in all sectors of the economy, and measures to improve the democratisation of national productivity.

On the 27th June 2007 in the official federal bulletin, the contract for interconnection to solar energy on a small scale was published. It is applicable to all solar energy generators with capacity equal to or less than 30 kW. The Law for the Promotion and Development of Bioenergies passed in February 2008, encourages the use of ethanol and other liquid bio-carburets.

In November 2008, the Renewable Energy Development and Financing for Energy Transition Law was passed (the Renewable Energy Law). The Bill mandated SENER to produce a National Strategy for Energy Transition and Sustainable Energy Use and a Special Programme for Renewable Energy. The main objective of the Law is to regulate the use of RES and clean technology, as well as to establish a national strategy and financing instruments to allow Mexico to scale-up electricity generation based on renewable resources. SENER and CRE are responsible for defining those mechanisms and establishing legal instruments to allow the increase of renewable power generation.

In November 2008, the Sustainable Use/Energy Efficiency Law was approved. Its objective is to provide incentives for the sustainable use of energy in all processes and activities related to its exploitation, production, transformation, distribution and consumption, including EE measures. More specifically, the law proposes:

  • The creation of the Programa Nacional para el Uso Sustentable de la Energía, which targets energy efficiency. The Programme focuses on electricity consumption activities in the industrial, residential, commercial and public sectors (e.g. replacement of appliances, old refrigerators, and incandescent bulbs by CFLs, EE investments in municipalities, industrial motors EE, cogeneration in the cement, steel and iron industries, water pumping EE, etc.).
  • The establishment of the Comisión Nacional para el Uso Eficiente de la Energía (CONUEE) as a decentralized body of SENER that (i) will advise the National Public Administration and (ii) promote the implementation of best practices related to EE. The Commission replaces the former Comisión Nacional para el Ahorro de Energía (CONAE), which has been the leading government EE body.
  • The creation of a Consejo Consultivo para el Aprovechamiento Sustentable de la Energía as part of the above mentioned Commission to evaluate the compliance of objectives, strategies, actions and goals of the programme. This Council will consist of the Minister of Finance and six researchers with extensive experience in the area.
  • The creation of the Subsistema Nacional de Informacion on EE to register, organize, update and disseminate information about energy consumption and its end-uses in (i) sectors that use this energy, (ii) distinct geographical regions of the country, as well as examining, (iii) factors that impel these uses and, (iv) indicators of EE.

In this context, the government is carrying out the following activities: (i) a programme aimed at replacing incandescent bulbs (IBs) for Compact Fluorescent Lamps (CFLs) in the residential sector, targeting over 200 million CFLs over a five year period, (ii) an appliances replacement programme targeting more than 5.5 million appliances over a 5-year period, (iii) the modernization of the public transport system for long distances and surroundings, (iv) a programme for EE in municipalities including the substitution of lamps for more efficient public lighting, (v) industrial and commercial EE programs, (vi) supply side EE in the electricity sector, and (vii) EE in PEMEX.

On August 12th 2013, the Mexican government presented a wide-ranging proposal for reform of the energy sector. The aims of the proposal include further developing the country’s oil and natural gas market as a source of economic growth, lowering electricity prices for the populace, and encouraging private participation in the energy sector. Key measures in the proposal include more autonomy for the parastatal CFE and PEMEX, whilst still retaining 100% state control of the companies. Also included are proposals to allow private participation in both the electricity and oil and gas sectors, specifically in upstream oil and gas operations, and in power generation, while maintaining state control over transmission and distribution activities. The proposed reforms also provide for the establishment of an independent transmission and distribution system operator to boost competitiveness, by determining power producer participation in the electricity market based on the lowest generation costs. In turn, these savings from competition should be passed on to consumers, resulting in lower electricity prices.

Whilst there is no direct support for renewable energy within the energy sector reform proposal, indirect effects of the opening of power generation to independent producers could result in increased RE penetration in the country.

Current energy debates or legislation: 

The fragmentation of politics in Mexico has exacted a considerable toll on the process of reform. Not only has debate over reform left the technical arena and become a completely politicized issue, but the constant debate and the lack of control by any single party in the Chamber has undercut any continuity in the energy reform strategy and made it difficult for critical investors to anticipate outcomes.

Moreover, available data shows that public opinion opposes privatization, even private investment in the energy sector. Mexicans who are aware of the existence of reform proposals (a small minority of the public) believe that the essence of the most comprehensive reform is a privatization that will undermine Mexican sovereignty.

Throughout 2009, the government issued and implemented a number of regulations, administrative fiats, and energy policy instruments aimed at promoting EE and increasing the number of RE projects in the country’s installed generation capacity. These include the publication of the National Strategy for the Energy Transition and the Sustainable Use of Energy and the Program for the Use of Renewable Energies, whereby the following goals have been set for 2012: increasing the participation of RES in the country’s total generation capacity to 7.6% and increasing the participation of RES in the country’s total power generation to a range of 4.5% to 6.6%.

In February 2011, a National Energy Strategy (2011-2025) was sent to congress for ratification.

Major energy studies: 

Prospectiva del Sector Eléctrico 2010-2025
Available at: 

Role of government: 

Energy policy is regulated by the Secretary for Energy (SENER). Its department drew up several laws: the organic law for Federal Public Management, the law for the Regulatory Energy Committee, Internal Regulations for the Energy Secretary, Internal Rulings for the National Committee for the Efficient Use of Energy and the official Mexican regulations with respect to electricity matters, energy efficiency, thermal efficiency natural gas and nuclear safety. Under the SENER, the National Energy Council (Consejo Nacional de Energia, CNE) is responsible for the development of the fifteen-year National Energy Strategy and the production of the yearly revisions to this strategy.

According to the Renewable Energy Law, the following functions are the responsibility of SENER among others:
(a) defining a national program for ensuring a sustainable energy development both in the short and the longer term,
(b) creating and coordinating the necessary instruments to enforce the law,
(c) preparing a national RE inventory,
(d) establishing a methodology to determine the extent to which RES may contribute to total electricity generation (such a contribution must be expressed in terms of minimum percentages of installed capacity and minimum percentages of electricity, and should take into account different kinds of renewables and regional available sources),
(e) defining transmission expansion plans to connect power generation from RE to the national grid, and
(f) promoting the development of RE projects to increase access in rural areas.

Government agencies in sustainable energy: 

National Commission for Energy Conservation (Comisión Nacional para el Uso Eficiente Energía – CONUEE).

Trust for Electricity Savings (Fideicomiso para el Ahorro de Energía Eléctrica – FIDE)

Instituto de Investigaciones Eléctricas (IEE)

The Secretary for the Environment and Natural Resources (SEMARNAT), who draws up environmental and natural resource conservation policies.

The Secretary for Social Development (SEDESOL), who promotes projects for the exploitation of renewable energies.

Energy planning procedures: 

It is worth mentioning the following among the actions taken to promote RES:

  • Plan for Renewable Energies on a large scale of the SENER to install 100MW from wind and 300MW from hybrid installations (generation using mixed renewable sources, or renewable and fossil).
  • Action Plan to Remove Obstacles to the Installation of Wind Energy (GEF/PNUD/SENER-IIE) in which the SENER by means of the IIE looks at the development of the Regional Centre of Wind Technology in Ventosa, Oaxaca.

There is the decree, Factors for a Policy to Promote Renewable Energies, to stimulate projects with the CDM in the Framework of the Kyoto Protocol and the drawing up of a National Programme for Rural Electrification by way of RES, in the states of Oaxaca, Veracruz, Guerrero and Chiapas.

In early 2013, the National Energy Strategy, initially sent to congress in 2011, was finally ratified, and is set to introduce a framework for the aggressive expansion of conventional and renewable energy sources. With regard to renewables, the main target is a wide-scale reform of the current legislative framework with regard to electricity use and to better promote renewable capacity development. This will include the introduction of cost-reflectiveness into the highly-subsidised electricity tariff structure, and the consideration of “externalities” in determining the true cost of energy, including carbon emissions and social impacts. Finally, new internal financing mechanisms to incentivise renewables will be developed.

Energy regulator Date of creation: 

The Energy Regulatory Commission (Comisión Reguladora de Energía – CRE) is in charge of regulating energy and is responsible for granting licenses in the management of activity development in the sector. This control is under federal jurisdiction and looks at technical and economic matters, among which is market stimulation. It was created in 1995.

Degree of independence: 

Section 1 of the Law of the CRE provides that it is a decentralized body of the Secretariat Energy, and is technically and operatively autonomous. The Commission Board is composed of one chairman and four members who are nominated by the Energy Minister and appointed by the President of Mexico. The commissioners are appointed for overlapping five-year terms, with the possibility of extension on ratification by the government.

Regulatory framework for sustainable energy: 

Three main legal instruments are expected to promote renewable energy in Mexico. One is the recent Energy Reform approved by the Congress of the Union. The second instrument is the General Law for Climate Change adopted in May 2012 which sets the goal of 35% of energy generated in the country should come from renewable sources by 2024. Although the degree of contribution for each technology has not been defined, RES installed capacity is planned to increase to 1, 2, 12 and 1.5 GW for biomass, geothermal wind and solar energy respectively by 2020. Finally, the Law for the Use of Renewable Energy and Finance of the Energy Transition recently modified and approved. This Law establishes, among other issues, the legal aspects and conditions for the use of renewable energy and clean technologies as well as reducing the use and dependency of fossil fuels. For instance, use of 2% of ethanol in gasoline in Guadalajara, Monterrey and Mexico City was introduced by the end of 2012. Additionally, the Law creates a Fund for the transition to clean and renewable energy and technologies. The Fund will create a Technical Committee for the administration, and the assignment and distribution of resources in order to promote the goals of the Strategy. The Committee might also decide on the use of the Fund for channeling credit and other financing support to foster the energy transition, energy saving, clean technologies and renewable energy. These three legal instruments are expected to create a better framework to support renewable energy in general and also a future green economy in Mexico.

Regulatory roles: 

According to the Renewable Energy Law, CRE is responsible for developing rules and norms regarding the implementation of the Renewable Energy Law, including provisions for promotion, production, purchase and exchange of electricity from renewable sources. CRE, in coordination with the Secretary of Finance (SCHP) and SENER, will determine the price that suppliers will pay to the renewable energy generators. Payments will be based on technology and geographic location. In addition, CRE will set rules for contracting between energy generators and suppliers, obliging the latter to establish long-term contracts from renewable sources.

Role of government department in energy regulation: 

The Mexican electrical system is co-ordinated by the Secretariat for Energy (SENER), the Regulatory Board for Energy (CRE), and the National Board for the Efficient Use of Energy (CONUEE). 

The SENER is the body dependent of the Federal Government and in charge of co-ordinating the national energy policy. The function of the CRE is to regulate private participation in the electrical and natural gas sectors. 
The CONUEE has the goal of fostering energy savings and efficiency and promoting renewable energies.

Regulatory barriers: 

Even though Mexico has a high potential of RES development, only a low percentage of this energy has been used (i.e. 1.7% and 2.3% in wind and geothermal power). Therefore, there are huge investment opportunities to improve the use of RES, but also there are some barriers that prevent its expansion in Mexico:

  • Energy strategy: it is based on methodologies that evaluate the feasibility of RES in short terms. The lack of valorization of the use of renewable energies (stability in energy prices in long-term and energy security) and the important oil resources of the country, mean that policies and energy prospective are based on fossil fuels reserves.
  • Policies: the fact that public institutions, which provide electric energy to the country, have to consume the cheapest source by law (fossil fuels in this case), leads to the non-promotion of RES. That is why economic and fiscal incentives should be considered. Generation of more financial mechanisms to make RES competitive against conventional sources is also required.
  • Technology: although potential of most RES are known, some others have not been considered such as low-enthalpy geothermal energy or wave power. Investment in exploration of RES is also needed, specifically in the case of geothermal power.


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