Mexico’s Comisión Federal de Electricidad (CFE) is currently overseeing a portfolio of 60 electricity transmission and distribution projects to boost interconnectedness and power supply across the country as it prepares for a boom in demand as a result of nearshoring, according to Ricardo Octavio Mota Palomino, general director of power grid operator CENACE.
“The CFE is managing a portfolio of important transmission and distribution projects that is going to allow the company to provide better service to all the people who are looking to interconnect power plants or generation plants to the Mexican electricity system,” said CENACE’s Mota, speaking Jan. 25 at the 9th Mexico Infrastructure Projects Forum in Monterrey. “These projects have $3.7 billion dollars in financing and are located in strategic regions across the country and are in their development stages.”
This is the final stretch for Mexican President Andrés Manuel López Obrador, or AMLO, who has called his national project the fourth transformation of Mexico. A general election is set to be held on June 2.
During his presentation, Mota assured the audience that Mexico has sufficient power to meet increasing demand in the country, and that the new CFE projects, which were planned in coordination with CENACE, would fortify the national electricity grid. Mota said the 60 works include the construction of electrical substations, new transmission lines and grid reinforcement projects, and will be introduced in regions throughout the country.
“The large majority of the projects are located in Mexico’s central region, known as Bajío, which is an area of important interest to bring in more companies associated with nearshoring,” he said. “There are also some important projects being developed in Baja California, the north of Chihuahua and the Tehuantepec isthmus.”
In his presentation, Mota explained that Mexico’s national electricity demand has grown between 3-4% annually since 2020 and the Covid-19 pandemic, and that the country produced 346,500 GWh in 2023. More than 58% of that supply was with natural-gas fired combined cycle plants.
Electricity Supply Risks Rebuffed
While many industry members at the conference expressed concerns that Mexico lacks sufficient electricity generation, transmission and supply to meet nearshoring demands, Mota insisted that the country’s power supply is sufficient and stable. The CENACE director, who was the only government official to speak during the first day of the conference, said that even during peak electricity demand periods such as the hot summer months of 2023, the national power grid was never at risk of insufficient supply.
“Electricity supply in Mexico isn’t at risk,” he said. “The system is in the process of incorporating new projects to reinforce power supply, and we have the capacity to continue growing and expanding the national electricity system.”
Mota said that, given Mexico’s dependence on U.S. natural gas to meet electricity demand, the country’s most important projects, such as the plant being constructed by Tesla Inc. in Monterrey, are not at risk of insufficient supply.
“Natural gas is the most accessible source that we have to supply electricity and meet the country’s growth demands in the short term,” he said. “Given the good relationship that we have with our neighbors to the north — and while there are events such as cold fronts that create risks for our energy supply — the growth and incorporation of new projects will continue to reduce those risks and strengthen the Mexican electricity system in the future.”
Mota referred to the United States as “very good friends and very good clients” and that Mexico will continue to depend on natural gas imports to supply the national electricity system for the long-term. He said that the country’s limited renewable energy generation provides intermittent power supply, though as solar and wind continue to be developed, the majority of the national grid is largely secure given the reliability of U.S. natural gas imports.
“Aside from the Baja California peninsula and the Yucatan peninsula…in the rest of the national interconnected system, we have sufficient capacity to avoid any sort of shocks to the system in the next few years,” Mota said.
