Mexican renewable energy firms say clear rules could trigger investment surge

Mexico could add 10GW a year of renewable energy capacity if the government implements clear rules governing private sector investment in the sector, industry executives said Wednesday.

"Mexico has everything to reach this annual target [of 10GW]," Alberto Cuter, VP for Latin America at Chinese solar module manufacturer Jinko Solar, told the Energyear renewable energy conference in Mexico City. 

On November 6, President Claudia Sheinbaum launched a national energy plan for the electricity sector which reserves 54% of the generation market for state-owned utility CFE.

The private sector can provide the remaining 46%, Sheinbaum said at the launch.

At the conference, executives said they needed more clarity before committing capital to Mexico.

"The 54%-46% share is great, but everyone needs clear rules," Cuter said.

With the right regulatory framework in place, Mexico has everything it needs to add 10GW of annual capacity from 2026, Cuter said. 

The country has extensive solar and wind resources and is home to developers who are experienced in large renewable projects.

Industry executives said they are eagerly awaiting secondary legislation which will define the rules for private sector investments in new renewable energy projects.

The legislation is expected to be published in early 2025.

Rising demand

With the rise of nearshoring and AI, demand for clean and reliable energy is forecast to rise rapidly in Mexico.

The private sector has a critical role to play if Sheinbaum is to achieve her target of increasing the share of renewable energy in Mexico to 45% by 2030, from under 20% currently.

"Cooperation is extremely important to being able to design a market that is attractive both for the public sector and the private sector," Cecilia Alvarado, chief commercial officer of power generator Engie México, told the conference.

"Mexico needs the energy, it has the potential," Jesus Abril, business development director at power generator AES México, said at the same event. "What we have to do is to ask the new administration to create a favorable environment for the investments to arrive."