Hydropower remains the largest source of renewable energy in Mexico, making up about 80 percent of the country’s renewable energy supply. At the end of 2017, roughly 17 per cent of the country’s total installed capacity was hydropower, accounting for 12 per cent of all sources of electricity generation. The country has an installed hydropower capacity of 12,125 MW and an estimated 27,000 MW of economically feasible hydropower potential.
The government has imposed significant reforms to the energy market in recent years to allow public and private companies to participate under equal conditions and offer electricity at competitive prices. The Comisión Federal de Electricidad, the state-owned electric utility of Mexico, widely known as CFE, once held a monopoly on all power activities. Under the market reform, CFE has been restructured to a competitive market, allowing for increased private sector engagement and increasing the future role of independent power producers in hydropower development.
While the Secretariat of Energy (SENER) oversees production and regulation of energy in Mexico, CFE continues to be the primary retail supplier of electricity in the country. CFE was unbundled into separate generation, transmission, distribution, supply and marketing subsidiaries, with power system operations transferred to the Centro Nacional de Control de Energia (CENACE) which now acts as the independent system operator.
Mexico continues to pursue its ambitious goals for increasing the country’s share of renewable energy sources within its overall generation portfolio . The Ministry of Energy released PRODESEN, the fifteen-year infrastructure development programme for the National Electric System (SEN). PRODESEN is a centralised planning initiative addressing important elements of the national electricity system including generation, transmission and distribution requirements.
By 2024, Mexico hopes to supply 35 per cent of power generation through clean energy, a target which will increase to 50 per cent by 2050. These aggressive goals should support hydropower development, including the maintenance and modernisation of existing infrastructure.
Growth in hydropower capacity has however been stagnant over the past two years, while wind power has enjoyed a 33 per cent increase and solar has doubled since 2015. Hydropower development has stalled following opposition to large-scale projects. As an example of this, the only large-scale project, Chicoasen 2, was delayed after public protests.
To address the concerns of protestors and local communities, the government announced a commitment to undertake a comprehensive study of sustainable development of energy infrastructure in Mexico, supported by USD 700,000 in funding from the Inter-American Development Bank. The project involves Mexico’s Secretary of Energy (SENER), the Federal Electricity Commission (CFE), The Nature Conservancy-Mexico (TNC) and the Mexican Association of Hydroelectric Energy (AMEXHIDRO).
Mexico’s national transmission grid has a total interconnection capacity of 74,208 MW, representing a 4 per cent increase over 2015. Proposals are in place to increase transmission interconnections with tenders to build five transmission lines worth USD 6.6 billion.
Mexico is integrated within the Central American Electrical Interconnection System (SIEPAC). The interconnection between Mexico and Guatemala is already fully operational, whilst that between Panama and Colombia is in the design phase; the extra-regional interconnection aims to establish a 98.6 kilometre long transmission line with a generation capacity of 400 KW. In addition to the Baja California-Sonora, Oaxaca-Mexico City and Baja California-Sonora transmission lines, Mexico is also finalising studies to auction two underwater transmission lines.
This country profile is featured in the 2018 Hydropower Status Report. Download the full report here.
This profile was last updated in June 2018.