Mexico’s energy system is under strain. With droughts and recent blackouts, the country’s power grid is struggling to keep up. The government has proposed a $22 billion investment to boost the system, benefiting the entire country. This move comes as energy demand rises with technological advancements and artificial intelligence.
Meeting Growing Energy Needs
The current energy infrastructure can’t meet the growing demand, especially in extreme temperature regions like the north. Modernizing the system is the only solution. The planned investment will add over 22,674 megawatts from renewable and combined-cycle sources. An additional 6,400 megawatts will come from private initiatives. This ambitious plan involves clean and renewable energy sources, as well as private and foreign investment.
The goal is to provide electricity to over half a million households that currently lack access. The new system will be more modern and suited to current needs. According to President Sheinbaum, this will not only boost industrial growth but also benefit marginalized regions. The plan includes producing some inputs for new plants in Mexico, rather than relying on foreign suppliers.
Challenges Ahead
Mexico’s energy infrastructure is not very reliable. Around 5.3% of energy is lost due to fraud and clandestine connections. The state-owned utility CFE has a plan to tackle energy theft. The CFE is also implementing a program to detect fraud and install new meters. Modern meters will help improve consumption efficiency and reduce losses. However, the system faces another challenge: its high dependence on US natural gas, which accounts for 60-80% of generated energy.
Any disruption in supply, such as frozen pipelines, directly impacts the electricity supply. The recent blackout that left four states in darkness highlighted this issue. While Mexico benefits from access to cheap US gas, this dependence is a vulnerability.
Green Energy Push
The National Electric Plan for 2030 includes 51 strategic projects. These comprise seven wind farms, nine solar plants, and five combined-cycle plants. The goal is to improve the electricity supply, making it sufficient, sustainable, and affordable nationwide. While foreign investment is necessary, the aim is for Mexico to have control and independence over these energies.
With this $22 billion investment, Mexico has a historic opportunity to modernize its electricity system, improve energy justice, and strengthen technological independence. Public investment, domestic production, and combating fraud are key to advancing toward the future.