Electricity

Last Review: November, 2024

Banobras offers interested parties information on the sector in Mexico with data from various sources in order to provide knowledge and useful elements for decision-making on the subject. The content presented does not reflect the position of Banobras.

• Lithium for Mexico (LithiumMx) has the objective is to carry out the exploration, exploitation, benefit and use of lithium located in national territory, as well as the administration and control of the economic value chains of said mineral.
• The National Institute of Electricity and Clean Energies (INEEL) promotes technological innovation in clean energies, promoting efficiency and sustainability in the sector.
• The National Institute for Nuclear Research (ININ) specializes in nuclear technologies for applications in medicine, industry, agriculture, and energy generation.

SENER’s Deconcentrated Entities

• The National Commission for the Efficient Use of Energy (CONUEE) is responsible for promoting energy efficiency and acting as a technical body for the sustainable use of energy.
• The National Nuclear Safety and Safeguards Commission (CNSNS) is in charge of responding to international commitments and requirements in the areas of nuclear, radiological and physical safety, as well as safeguards.

Coordinated Regulatory Entity in Energy Regulation

The Energy Regulatory Commission (CRE)* is an entity of the Federal Public Administration (APF), with the character of Coordinated Regulatory Entity in Energy Regulation, which shall regulate and promote the efficient development of the following activities:

• Those of transportation, storage, distribution, compression, liquefaction and regasification, as well as the sale to the public of oil, natural gas, liquefied petroleum gas, petroleum products and petrochemicals.
• The transportation by pipelines, storage, distribution and sale to the public of bioenergy products.
• The generation of electricity, public electricity transmission and distribution services, electricity transmission and distribution that is not part of the public service and the commercialization of electricity.

*On November 22, 2024, the Plenary of the Chamber of Deputies approved by qualified majority the constitutional reform that extinguishes seven autonomous bodies, among them the CRE. The legal changes must be made within 90 days.

State-owned Public Company

The Federal Electricity Commission (CFE) is the main producer and supplier of energy in the country. As part of its public purpose, it must provide the public service of transmission and distribution of electric energy, on behalf of the Mexican State, as well as carry out the generation divided into units and commercialization of electric energy and associated products, including the import and export of these. Additionally, the import, export, transportation, storage, purchase and sale of natural gas, coal and any other fuel and other activities necessary for the full compliance of its purpose, among other activities.

According to the 2023-2024 Work Report of the Ministry of Energy (SENER), the transformation of the Federal Electricity Commission (CFE) began in December 2018, when it shifted from being an electricity company to an energy company, while also functioning as a lever for national development. This change is the result of the diversification of activities in the energy sector, with a particular emphasis on fuel management, especially natural gas, through a business model with a social focus.

On October 31, 2024, the decree was signed through which the CFE returned to being a State Public Company, following the approval of the energy reform by the Chamber of Deputies, the Senate and the majority of local congresses. As a result of the reform, the “National Strategy for the Electricity Sector”  is presented, based on 4 guiding principles that seek to strengthen the planning of the national electricity sector.

1. Strengthening the planning of the National Electricity Sector: The state recovers the steering role of energy policy, guarantees energy sovereignty and ensures the supply of electricity to companies while promoting equitable, inclusive and comprehensive development for all.
2. Energy justice: Contributes to the well-being of the people by maintaining the price of tariffs and bringing electricity to homes that do not have it today.
3. Robust, reliable and safe electric system: CFE implements a Reliability Plan to ensure the reliable, safe and continuous operation of the National Electric System. Investments are expected to reach 23.4 billion dollars by 2030.
4. Certainty for private investment: The participation of private companies in the sector will have clear rules and private participation will be maintained with a percentage of 46% in electricity generation.

Alignment of CFE’s planning with the Program for the Development of the National Electric System (PRODESEN) 2024-2038

The PRODESEN is the Mexican Government’s public policy instrument that sets forth the planning of the National Electric System (SEN) with a fifteen-year horizon, establishing the objectives, goals, strategies and priorities to be adopted to meet the system’s demand. The PRODESEN contemplates the recovery of the CFE’s generation, transmission, distribution and electricity supply capacity.

According to the Electricity Industry Law (Article 3), the electricity industry is composed of the following subsectors:

• Generation: Production of electricity from various sources, including renewable energies.
• Transmission: Transportation of electricity through high voltage networks.
• Distribution: Delivery of electricity from transmission networks to end users.
• Commercialization: Sale of electricity to end consumers, both residential and industrial.

Energy demand

In 2023, net electricity consumption grew 3.5% over 2022, exceeding long-term projections. An annual growth rate is expected for the 2024-2028 period of 2.4% in the base scenario, 2.9% in the high scenario, and 2.1% in the low scenario.^[1]

Power generation

Total generation in 2023 was 346,504 GWh, with 23.2% coming from clean energy. By licensee, the CFE generated 41.9% of the total, the PIEs 29.7%, and the private sector 27.7%. Net generation is expected to reach 525,151 GWh by 2038, with a focus on incorporating green hydrogen starting in 2035 to accelerate the energy transition and reduce natural gas consumption in power plants of this type.^[2]

Transmission and Distribution

The National Transmission Network (RNT) is the set of networks that transport electric energy to the General Distribution Networks (RGD) and to the public in general, including connections with foreign electric systems (12 international links), and operates with voltages of 69 kV or higher. The RGD are the networks in charge of distributing energy to the public, and are made up of medium voltage networks (between 1 kV and 35 kV) and low voltage networks (1 kV or less).

The RNT has 110,685 km of lines at the end of 2022, an increase of 0.12% compared to 2021. Energy losses in the RNT and RGD represented 12.2% in 2023, similar to 2022, with a projected reduction to 10.8% in 2024 and 7.9% in 2038. Electricity coverage reached 99.43% of the population in 2023, with 743,685 people still pending electrification. During 2023, 4,648 electrification projects were carried out with an investment of 3,328 million pesos.[3] The following is a list of the projects that will be carried out in 2023.^[3]

Installed capacity

In 2023, the installed capacity of electricity generation was 93,788 MW, with CFE concentrating 50.2%, PIEs 18.7%, and private companies 30%. An installed capacity of 176,516 MW is projected for 2038, with a net addition of 82,728 MW in the period 2024-2038, highlighting the incorporation of 31,739 MW of clean energy by 2030 and the transition to natural gas and green hydrogen in combined cycle plants.^[4]

For more information on the sector, there is the Energy Information System (SIE), which integrates information in a database fed by the Mexican energy sector agencies, as well as by the Ministry of Energy, responsible for the National Energy Policy. This portal offers the public official statistical information validated by the Energy Sector Units that generate it. Registration is required to log in.

[1] Prodesen 2024-2038 page 96
[2] Prodesen 2024-2038 page 202
[3] Prodesen 2024-2038 page 69
[4] Prodesen 2024-2038 page 96

The National Center for Humanities, Science and Technology (CONAHCYT) makes available to interested persons the Map of the National Electric System. The map shows the operating power plants of the SEN by type of technology and the National Transmission Network. It is possible to visualize the information of each power plant by clicking on the point that represents it:

In terms of infrastructure, Mexico has a defined strategy that offers investors medium and long-term visibility regarding the development of projects, through a series of plans and programs of national and sectorial scope. To access the information, please consult the following documents:

Description of the hierarchy and roles of the different entities and actors involved in the sector, including how the different institutions and agencies coordinate and collaborate.

Products:

• Direct credit for infrastructure projects and public services
• Infrastructure financing through financial intermediaries
• Financial Guarantee
• Guaranteed Refinancing

Financing for States and Municipalities and Decentralized Public Organizations: The products and services are designed to meet the infrastructure needs of states, municipalities and their decentralized public organizations, in order to improve the quality of life of the population and increase competitiveness.

Infrastructure is a pillar of development, which is why Banobras has innovative products and services focused on contributing to regional development through the promotion of financial mechanisms to:

Boost investment in infrastructure and public services.
Promote the financial and institutional strengthening of states, municipalities and decentralized public agencies.
To this end, Banobras has the following financing schemes:

Products:

• Simple Credit and Restructuring and/or Refinancing
• Current Account Loans

Project Development: Banobras offers services aimed at assisting public sector agencies and entities in the development of infrastructure projects.

Financial structuring of the project:

1. Elaborate and/or update studies required by the Public-Private Partnerships Law.
2. Support in the review of the bidding conditions and contract model.
3. Assist in obtaining financing for the project.
4. Assist in the registration process of the project in the portfolio of the Investment Unit of the Ministry of Finance and Public Credit (SHCP).
5. Assist in dealing with any observations made by the SHCP Investment Unit.
6. Support in the financial closing of the project.

It has a wide range of products designed to strengthen the financial structure of the infrastructure projects that the country requires, from the conception to the completion of the projects, providing the following financial instruments that make the projects more attractive for financing with private resources:

Contact: fonadin.energia@banobras.gob.mx