Mexico Plans to Approve $12.5 Billion in Renewable Energy Projects

Mexico is preparing to approve renewable energy projects with a total investment of up to $12.5 billion, which are expected to add 8.2 gigawatts (GW) of power generation capacity.

President Sheinbaum has set a goal to add 32 GW of generation capacity by 2030, with solar and wind power—supported by private investment—expected to play a primary role.

Grid upgrades and transmission costs remain significant challenges. Meanwhile, Mexico continues to expand its oil production, aiming for an output of 1.8 million barrels per day by 2030.

According to Bloomberg, citing anonymous sources, Mexico’s state-owned electric utility, the Federal Electricity Commission (CFE), is set to approve up to 60 alternative energy projects—predominantly solar—which would add 8.2 GW of capacity. These projects represent a potential total investment of $12.5 billion.

Another source, also speaking on condition of anonymity, told Bloomberg that the final number of projects approved by the CFE today could be fewer than 60. Regardless of the final tally, the approvals will contribute to President Sheinbaum’s target of adding approximately 32 GW of capacity by 2030. Initially, it was anticipated that about 70% of this 32 GW increase would come from alternative energy sources like solar and wind; however, Bloomberg reports that this share has now fallen to approximately 30%.

Earlier this February, the Mexican President stated: "Mexico is more than just oil; we also have sunlight and wind—clean energy sources with a smaller environmental footprint. We are advancing an energy transition to increase the share of renewables in our electricity consumption. This is our most critical objective between now and 2030."

Looking at the situation in Europe, countries with the largest installed capacities for wind and solar power often also face the highest electricity prices. This suggests that the implications of an energy transition may be more complex and less straightforward than many assume. In reality, Mexico possesses abundant climatic resources that remain largely untapped.

The government has begun taking steps to change this. Earlier this month, Mexico’s Ministry of Energy announced that 42 photovoltaic (PV) projects—totaling 6.86 gigawatts (GW)—and 13 wind power projects—totaling just over 4 GW—have been added to the project pipeline. According to *PV Magazine*, the Federal Electricity Commission (CFE) is involved in approximately 70% of these projects. The report also noted that an additional 4.44 GW of PV capacity and 2.16 GW of wind capacity are awaiting the allocation of development rights.

Wind and solar power are key priorities under President Sheinbaum’s energy policy, which seeks to grant the private sector a larger role in Mexico’s energy industry. The current administration has stipulated that state-owned power utilities must account for at least 54% of total national electricity generation, leaving the remaining 46% open to private-sector participants. Mexico’s Secretary of Energy, Luz Elena González, stated that, thanks to these reforms, private companies are planning to invest $4.75 billion into 20 independent projects, adding a combined 3.32 GW of alternative energy capacity.

There is hope that the addition of more wind and solar capacity will help stabilize Mexico’s power grid, which has long been prone to outages. However, such outages are typically linked to weather events—like thunderstorms—rather than the specific types of power generation used. Furthermore, the total construction costs for these new projects could rise, as they will require the development of additional transmission infrastructure to deliver electricity from wind and solar plants to major load centers.

Nevertheless, the push for alternative energy does not come at the expense of Pemex (Mexico’s state-owned oil company) or the development of the country’s domestic oil and gas resources. In fact, President Sheinbaum is pursuing an energy security strategy that balances various energy sources; increasing oil production remains a priority for her administration, with a target to raise daily crude oil output to 1.8 million barrels by 2030. The government is placing greater emphasis on expanding power generation capacity: plans for the next four years include a 140% increase in solar photovoltaic capacity, a 90% increase in geothermal capacity, and a 70% increase in wind power capacity.