Mexico - Country Commercial Guide
Electricity Sector

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-09-02


Mexico’s National Electric System (Sistema Eléctrico Nacional or SEN) is one of the largest in the Western Hemisphere. It is comprised of nine regions, including a binational electricity system in Baja California. Most of the nine regions are interconnected, forming the National Interconnected System (Sistema Interconectado Nacional or SIN). The Baja California system operates in the Western Interconnection of the United States, overseen by the Western Electricity Coordinating Council (WECC).

According to Mexico’s National Electrical System Development Program (Programa de Desarrollo del Sistema Eléctrico Nacional or PRODESEN), the total generation capacity as of December 2020, including power generation plants from the Federal Electricity Commission (Comisión Federal de Electricidad or CFE) and from private companies, reached 83,121 MW. By April 2021, the generation capacity increased to 89,479 MW, which represented an increase of 7.6 percent in comparison to 2020. A total of 35.5 percent of this power generation capacity was from clean energy sources (renewable and non-renewable, such as nuclear and efficient cogeneration), and 64.5 percent was from conventional sources (combined cycle, conventional thermal, coal-fired, gas-fired, and internal combustion). According to the International Energy Agency, Mexico’s population is expected to grow to over 150 million by 2050, considerably increasing energy demand. The industrial and commercial sectors account for 72 percent of electricity demand, representing the strongest opportunity for U.S. exports given the need to reduce energy costs and improve energy efficiency. However, it is necessary to consider recent policy developments that impact the type of projects that are most likely to be executed going forward.

The electrical power sector has experienced several policy changes under the current Mexican administration, which are altering the dynamics of the electricity market for private sector participants. Mexico has taken steps to strengthen the role of CFE, so that it can become, as in the past, Mexico’s primary supplier of electricity. This is a top priority of the Government of Mexico.

CFE’s Business Plan also reflects this. The document outlines that CFE plans to grow its market share and account for 54 percent of total power generation in Mexico, without acquiring more debt. To make this possible, in July 2020, the Board of Directors approved the creation of the Investment Master Trust, which will be the financial mechanism for CFE to allocate resources towards power generation and to participate in the wholesale electricity market.

Development Program of the National Electrical System 2020–2034

On June 30, 2021, the Secretariat of Energy (Secretaría de Energía or SENER) published the 2021–2035 National Electrical System Development Program (Programa de Desarrollo del Sistema Eléctrico Nacional or PRODESEN). This planning document addresses electricity generation, transmission, distribution, and commercialization needs of the SEN. The 2020 PRODESEN emphasizes the need for the reactivation of CFE by increasing the number of its power plants. For instance, in the medium-term, there is a plan to construct new combined cycle power plants, to rehabilitate and modernize existing hydroelectric plants, and to potentially equip others that already have hydraulic installation. According to SENER, the Mexican Government intends to direct the planning of the SEN, guaranteeing the supply of electrical energy in accordance with the requirements of national development by coordinating the different sources of generation of the CFE and of private sources. The PRODESEN also specifically includes provisions concerning the modernization of the electrical system, which includes combined cycle, transmission, and distribution projects. In addition, it describes the capacity program in the short- and medium-term for 2020-2024, which is based on the revision of projects, with interconnection contract and strategic projects to comply with the national energy policy.

Mexico’s New Electricity Market Rules

On April 29, 2020, the National Center for Energy Control (Centro Nacional de Control de Energía or CENACE) announced a resolution seeking to guarantee the efficiency, quality, reliability, continuity and security of the SEN in recognition of the COVID-19 pandemic. According to this resolution, the intermittency of wind and solar plants affects the reliability, quality, and continuity of the SEN. Therefore, CENACE suspended the pre-operative tests from wind and solar plants. According to recommendations published by Mexico’s Federal Economic Competition Commission (Comisión Federal de Competencia Económica or COFECE), the actions indicated in CENACE’s resolution could run contrary to free competition and could increase electricity rates. CENACE communicated on June 16 this resolution’s invalidity following legal injunctions from various industry participants and civil associations.

On May 15, 2020, also SENER published a resolution in Mexico’s Official Gazette regarding the reliability, safety, continuity, and quality policy for the SEN. This includes power generation, transmission, distribution, and commercialization of the SEN, as well as the operation of the Wholesale Electric Market. Private sector participants believe that this policy will allow CENACE to dispatch energy from costly CFE-owned plants ahead of more economically efficient private renewable generation. In March 2021, SENER canceled the application of the reliability policy ahead of the Senate’s vote on President Lopez Obrador’s reform to the Electric Industry Law which included many of the same provisions.

On February 1, 2021, Mexican President Andres Manuel Lopez Obrador submitted a decree to reform the Electric Industry Law (Ley de la Industria Eléctrica). This law was approved by the Mexican Congress on February 23, 2021 and by the Mexican Senate on March 2, 2021. It was officially published in Mexico’s Official Gazette on March 9, 2021. However, on the same day it was published, the law was challenged in court and a judge granted a temporary suspension. On March 10, the Court issued a provisional suspension covering all the participants in the electricity market. On March 18, the Court granted a definitive suspension until there is a resolution of the injunctions filed by the companies. On March 24, SENER published the suspension of the law in Mexico’s Official Gazette, as requested by the Court.

Mexico’s New Electric Industry Law

Mexico’s new Electric Industry Law, published on March 9, 2021, includes the following objectives:

To modify the electricity dispatch system to favor power generation from CFE’s plants;
To grant permits in accordance with planning criteria of the SEN, which are established by SENER;
To establish that the granting of the Clean Energy Certificates (CEL) will not depend on the property or date of commercial operations of power generation plants;
To eliminate the obligation of CFE’s Basic Electricity Service to buy electricity from auctions;
To obligate the Energy Regulatory Commission (Comisión Reguladora de Energía or CRE) to ban self-supply permits that were obtained by acts that are constituted as legal fraud; and
To revise the legacy and profitably of government commitments to energy capacity contracts.
The U.S. Commercial Service Mexico is closely following policy developments and their impact on current and future business opportunities in the electricity sector for U.S. exporters.

Industrial and Commercial Sectors

Together the industrial and commercial sectors represent 72 percent of electricity demand. Industrial manufacturing, operations, and commercial activities have been impacted by high electricity rates.

In the wholesale electricity market, large industrial and commercial users of electricity are known officially as qualified users, or usuarios calificados. These are companies that require high electricity consumption for their activities. They are registered with the CRE to acquire electricity directly as a participant of the wholesale electricity market, or through an electricity supplier (known as a qualified supplier or suministrador calificado).

Qualified users of electricity with a minimum demand requirement of 1MW tend to evaluate different criteria before signing a Power Purchase Agreement (PPA) with their preferred qualified supplier. Most competitive alternatives offer a tailored package of power, capacity, cost-effectiveness, energy efficiency, and clean energy certificates, according to the manufacturing or business needs. Since the energy reform (2013-2014), the industrial sector has expressed high interest in renewable energy projects. However, there is recognition among the private sector that challenges to successfully developing and participating in these projects remain, including permit delays, transmission constraints, and lack of return on investment. On May 28, 2020, the CRE passed two resolutions to increase transmission rates on legacy PPA-generating facilities. On June 12, 2020, the economic variables to calculate transmission charges were officially published in Mexico’s Official Gazette. The CRE resolution was provisionally suspended via court injunction in July 2020.

Even with these challenges, the industrial and commercial sectors are an important area of opportunity for U.S. exports, as they represent the largest percentage of electricity demand. These companies are continuously looking for technological alternatives to increase energy efficiency and reduce costs.

Mexico Power Generation Equipment
(Figures in USD Billions, HS Codes 8501, 8502, 8503)





2021 (Estimated)

Total Local Production





Total Exports





Total Imports





Imports from the U.S.





Total Market Size*





Exchange Rates





*Total market size = [(total local production + imports) – exports]

Source: Banco de México, PROMEXICO, est. from INEGI, SENER, (PRODESEN), U.S. International Trade Administration, World Trade Atlas and interviews with importers, distributors, and end-users of electrical equipment and power generation equipment and services.

The market for power generation equipment in Mexico is estimated to have decreased by 4.9 percent from 2020–2021, while exports from the United States to Mexico are expected to decrease by 6.3 percent. This trend may change considering recent announcement for new CFE’s combined cycle plants.

Leading Sub-Sectors

Key sub-sectors relevant for U.S. exporters include power generation, energy efficiency, distributed generation, energy storage technologies, and small-scale renewable energy projects.


Considering the Mexican government’s priority is to strengthen the role of CFE, and that CFE plans to regain its leadership role to reach 54 percent of total power generation, there is an important opportunity to participate in projects that are announced on CFE’s website. Five major projects for combined cycle plants (San Luis Rio Colorado, Tuxpan, Gonzalez Ortega, Valladolid, and Merida) have already been announced. In addition, CFE’s Business Plan outlines where the state-owned enterprise is projected to invest 381,544 million pesos (approximately USD 19 billion) from 2020-2025: 53 percent to power generation projects (new plants and maintenance), 20 percent to distribution, 20 percent to transmission, and the remainder to other projects, such as Internet and Fiber Optics.

In addition to power generation, Mexico’s electrical power industry offers opportunities for U.S. products, services, and technologies for energy efficiency, distributed generation, energy storage technologies, and small-scale renewable energy projects. The U.S. Commercial Service Mexico is happy to assist interested U.S. exporters in exploring these opportunities.


  • Mexican Secretariat of Energy (SENER)
  • National Control Center for Energy (CENACE)
  • Federal Electricity Commission (CFE)
  • Energy Regulatory Commission (CRE)
  • National Institute of Electricity and Clean Energy (INEEL)
  • Trust for Electric Energy Saving (FIDE)
  • National Commission for Energy Efficiency (CONUEE)
  • Federal Commission for Regulatory Improvement (COFEMER)


Power-Gen International/Distributech, Dallas, Texas


For more information on the electricity sector in Mexico, please contact:

Claudia Salgado

Commercial Specialist

U.S. Commercial Service—Mexico City

Tel.: +52 (55) 5080-2000 ext. 5224