The Challenges of the Electricity Sector

Recently, the CFE awarded 37 mixed projects totaling 7,411 MW, after receiving more than 200 proposals. The figure confirms private appetite, following the constitutional changes of 2024, but it does not resolve the structural challenges facing the sector and that could create logistical and operational obstacles.

On the positive side, the call exceeded the target of 6,500 MW and selected projects from 31 developers. The Yucatán Peninsula and the Northeast concentrated 20 awards, ten in each region. Around 6,710 MW are solar, compared with a requirement of 3,550 MW; wind remained close to 700 MW against a target of 2,850 MW, and solar thermal received no awards. The market responded as it could, mainly through photovoltaic developments with mature technology, known financing, and shorter execution times.

However, the first risk lies outside the contract and within the supply chain. The electricity demand associated with artificial intelligence, data centers, advanced manufacturing, and electrification at the global level puts pressure on the same equipment that Mexican projects will need. Releasing the bottleneck is complicated because it is not only the panels, but also power transformers, substations, control equipment, inverters, protections, microprocessors, circuits, specialized wiring, electrical steel, and copper wiring.

Given the shocks to supply chains, a bid awarded in the procedure using current market variables may reach the construction stage with prices and dates different from those that made the model viable, as a result of the increase in demand in other projects.

For example, in the United States, demand for transformers grew by more than 200% between 2019 and 2025, and demand for substation transformers by more than 100%. Additionally, prices have risen by around 80% in five years and some large equipment faces delivery times of up to four years. For Mexico, this may be an imported constraint. If a transformer or a substation arrives late, not only is the project delayed, but also the expected energy.

The second risk is more structural. So far, the visible push is concentrated on renewables and storage, but a sufficient portfolio of firm projects does not appear with the same clarity. Batteries help shift energy and support ramps, but they do not replace the continuous availability required by a system with growing peak demand. There, the problem is no longer only solar, transmission, or storage, but the schedule for thermal equipment.

Gas turbines and engines are also entering into scarcity. Global demand for flexible generation is growing alongside data centers and industry, and manufacturers and analysts report waits of three to seven years for gas turbines, with queues that may reach 2030 or beyond. Every year that Mexico takes to approve, contract, and execute firm projects shifts the real entry of capacity into the next decade.

Thus, yes, the call shows appetite, but the system needs execution. Renewable resources are not deliverable energy and installed capacity is not firm capacity. Additionally, awarded capacity is not operating capacity, and permits not granted today will not be able to materialize quickly. The longer Mexico takes to promote the development of private thermal projects, to turn mixed projects into actual construction, and to complement renewables with firm capacity, the more likely it is that the electricity problem of the next decade will not be the lack of private interest, but the lack of capacity that can be executed on time.

This article was originally published by La Prensa OEM.
Date: June 21, 2026
Link: https://oem.com.mx/la-prensa/analisis/opinion-de-paul-alejandro-sanchez-campos-los-retos-del-sector-electrico-30672915 [Online]

Clean Energies, from a Means to an End

Regarding the debacle generated by the regulatory changes of the Energy Regulatory Commission related to the measurement of energies in the national electric system, I believe it is important to remember that increasing clean energies in the energy matrix of our country is not an end in itself and the correct indicator is not the percentage of clean energies that the matrix has.

Clean energies are a means for the reduction of greenhouse gas emissions, for the decarbonization of the energy matrix and of the emissions intensity of the national electric system. The famous percentage of 35% is an indicator that was calculated with the purpose of determining how much clean energy proportional to the total was necessary to reduce a given volume of emissions.

“Clean energies are a means for the reduction of greenhouse gas emissions.”

But let us go to the beginning. After the signing, ratification and entry into force of the Paris Agreement, the countries took on as a task to establish the nationally determined contributions. Within this framework, Mexico established a series of commitments for the 2020-2030 period within which the following stands out: “By 2024, 35% clean energy will be generated and by 2030, 43%, including renewable energy, cogeneration with natural gas and thermoelectric plants with CO2 capture.”

At that time, with data from 2013, Mexico’s greenhouse gas emissions for electric generation were 127 million tons of CO2 equivalent, so it was determined that by having clean energy generation of 35% by 2024, then the emissions that were linearly calculated could reach 177 million tons and decrease to around 130 million tons of CO2 equivalent.

The regulatory changes published by the Energy Regulatory Commission at the end of the month of May, which modified the methodologies for the measurement of clean energies to consider as clean energy that electricity produced by the gas steam of combined cycle plants that use natural gas, as long as it does not use additional fuel, derived in the update of the National Electric System Development Program (PRODESEN) 2023-2037.

In that sense, and according to said document, generation in 2022 presented a total of 31.2% clean energies, an amount that was obtained based on the methodological modifications of Agreement No. A/018/2023 of the CRE, published in the DOF on May 26, 2023. That is, because of the change in calculation from 2021 to 2022, the newly catalogued non-renewable clean energy increased by 7,502.1 GWh.

This recategorization, however, does a poor favor to the reduction of international commitments, since according to SEMARNAT data, from 2021 to 2022 the emissions factor of the National Electric System went from 0.423 tons per MWh to 0.435 tons per MWh. That is, more clean energy by reclassification with more emissions in the system.

If we consider the same information from PRODESEN 2023-2037, we can multiply the total generation of the system by the emissions intensity to obtain the absolute, that is, in 2021 when 328,598 GWh were generated, 138,997 kilo-tons of CO2 equivalent (ktCO2eq) would have been produced and in 2022 with 340,713 GWh, 148,210 ktCO2eq were emitted into the atmosphere. There is the paradox, since our emissions increased by almost 10,000 tons, at the same time that the participation rate of clean energy generation increased.

The moral of this story is that it is of no use to us to see the participation of clean energies as an end, since in themselves they should be a means for the reduction of greenhouse gas emissions. That is, even if tomorrow all gas were declared clean and 80% of the country’s energy, by decree, were clean, the reality would be that, ultimately, there are no emissions decreases, therefore, the country’s progress in fulfilling its climate objectives would continue to be highly insufficient.

This article was originally published by Energía a Debate.
Date: June 12, 2023
Link: https://energiaadebate.com/energias-limpias-de-un-medio-a-un-fin/ [Online]

The Green Party and the Electric Reform

The position of the Ecologist Green Party of Mexico (PVEM) regarding the electric reform proposed by the federal government should go down in history as a serious risk to the environment of Mexicans and as a flagrant violation of the principles of green parties worldwide.

Green parties exist in a large part of the world and are born as an alternative movement to traditional parties of the left or right, liberal or conservative, because instead of proposing a broad agenda based on a series of values, they concentrate on an ideal or specific value and seek to influence the political system transversally, in this case and primarily, the environment.

For the most part they are the result of the revolution on sustainability that developed in the 1970s-1980s and if we start from the classic quote by Max Weber: “Politics is the aspiration to participate in power or influence the distribution of power,” initially these political organizations, more than the aspiration to participate in power, had as their purpose to influence the distribution of power in order to position sustainability on the agenda.

The first green parties appeared in Australia, New Zealand, Switzerland and the United Kingdom in the 1970s and began to spread throughout the rest of Europe between the 1980s and 1990s with the growing relevance of sustainability, the environment and climate change of the new world order after the Cold War. In Mexico, as part of that same wave, in 1993 the Ecologist Green Party of Mexico was founded.

In 2001, around 800 delegates from green parties from 72 countries in the world met in Australia to sign the Global Greens Charter based on six guiding principles: ecological wisdom, social justice, participatory democracy, nonviolence, sustainability and respect for diversity.

The Global Greens Charter was revised in 2017 and in it they recognize the climate crisis as one of the great challenges of world society and establish their commitment to limit the increase in global temperature to no more than 1.5 degrees, for which emissions should have gone down by 2020.

The agenda of the greens considers, then, working to support the transition to a zero-emissions global economy, promoting a moratorium on fossil fuels, stopping deforestation, promoting taxes on non-renewable sources and using the funds to finance the adoption of renewable energies and energy efficiency programs.

After reviewing the history and principles of the Greens worldwide, it is impossible to justify the arguments and actions of the PVEM in the proposal for constitutional reform in electric matters promoted by the federal government, since, despite the fact that it is established in the constitutional text, it does not contribute to the energy transition.

“…the green supports an initiative that bets that with the change of dispatch, CFE plants that use diesel, fuel oil and mineral coal will be used first.”

Instead of that, the green supports an initiative that bets that with the change of dispatch, CFE plants that use diesel, fuel oil and mineral coal will be used first. In contradiction, hydroelectric plants will not be able to increase their capacity in great proportion and will depend largely on the amount of water stored during the rainy seasons.

The PVEM allied itself with a project that does not establish taxes on fossil sources and, on the contrary, eliminates the only financial instrument that existed to promote the installation of renewable energies, the Clean Energy Certificates (CEL). In addition, instead of limiting dirty generation, it will promote it.

For this reason, and if Mexicans had a reliable long-term memory, the position of the Ecologist Green Party of Mexico regarding the electric reform proposed by the federal government should go down in history as a violation of the international principles of green parties, against the historic struggle of these organizations worldwide and against our environment. Unless green is only because of the color of the bills.

This article was originally published by Energía a Debate.
Date: Aplirl 12, 2022
Link: https://energiaadebate.com/el-partido-verde-y-la-reforma-electrica/ [Online]