Sheinbaum launches massive Mexican clean energy drive, seeks private sector support

Mexico plans to add nearly 16GW of clean energy generation capacity over the next six years, as it aims to cut carbon emissions and reduce its dependence on natural gas from the US.

President Claudia Sheinbaum, a former climate scientist who took office in October, said on Wednesday that state-owned utility CFE will develop 9.6GW of clean energy plants from 2025 to 2030.

Speaking at a press conference in Querétaro state in central Mexico, Sheinbaum said that the private sector will provide the remaining 6.4GW.

As a result, clean energy will account for 38% of Mexico’s total electricity generation capacity, up from 22.5% at present. 

"It's a very ambitious program," Sheinbaum said. "Most of the growth in the sector will be public via CFE."

CFE will invest US$10.5bn by 2030 to develop seven wind farms with total capacity of 2.5GW, nine solar photovoltaic plants with capacity of 4.7GW and 2.4GW of battery storage.

Sheinbaum did not specify how much the private sector would invest.

In line with government policy, battery storage will be equivalent to about 30% of the capacity of the new renewable energy plants.

Major policy shift

The plans mark a dramatic turnaround from the energy policy of Sheinbaum’s predecessor Andrés Manuel López Obrador (AMLO).

Under López Obrador, renewable energy investment in Mexico slowed to a trickle as CFE embarked on a multi-year program of building combined-cycle gas turbine (CCGT) plants.

Currently CFE has just 433MW of solar photovoltaic capacity and 86MW of wind farms, compared with 30GW of power plants that run on fossil fuels.

In the next two years, CFE will start up 10 combined-cycle plants ordered by López Obrador, adding 7GW of CCGT capacity. Seven of those plants will start operations this year.

Sheinbaum’s expansion plan for CFE includes five CCGT plants with a total 2.6GW of capacity, less than for both wind power and solar.

One of those projects is the reconversion of the heavily polluting plant in Tula, Hidalgo state, from fuel oil to natural gas.

CFE's first solar parks will begin operating in 2027-28. 

The utility will start launching public tenders for its generation projects within the next two months, CEO Emilia Esther Calleja Alor said at the press conference.

Generation capacity rises

The Sheinbaum administration plans to add nearly 22GW of generation capacity between 2025 and 2030, including clean energy and fossil fuel projects from CFE and renewable energy from the private sector.

Including the power plants ordered by Lopez Obrador and nearing conclusion, Mexico’s generation capacity will increase 29GW by 2030. 

That represents an increase of 31% on Mexico’s current generation capacity of 92GW.

In total, CFE will invest US$22.4bn in 51 generation projects from 2025-30. 

It will also invest in 145 transmission projects, including 65 new projects identified by the Sheinbaum administration that will cost US$2.2bn.

The state government of Querétaro had proposed an innovative public-private partnership to finance transmission lines in the state. 

Sheinbaum said Wednesday that it was not necessary to involve private companies and that CFE would make the investment itself.

CFE has a monopoly on transmission in Mexico.