After years of delays and restrictions to private investment, Mexico’s renewable energy sector is expected to undergo a transformation as President Claudia Sheinbaum encourages greater private sector participation to expand the country’s energy sector. Solar and wind energy will be a major focus, thanks to Mexico’s favourable climatic conditions, which will go hand in hand with the expansion of the country’s transmission network.
In March 2025, President Sheinbaum announced a new National Energy Reform that opened Mexico to greater private participation and encouraged the growth of the country’s renewable energy capacity. Under the reform, at least 54 percent of the national grid’s electricity must be generated by the state-owned Federal Electricity Commission (CFE), with the remaining 46 percent available for private sector producers.
The reform dissolved Mexico’s independent energy regulators – the National Hydrocarbons Commission (CNH) and the Energy Regulatory Commission (CRE) – replacing them with a centralised National Energy Commission (CNE).
The reform aligns with the Sheinbaum government’s national Plan México investment strategy, which aims to add 22 GW of new power generation capacity by 2030, as well as deliver a portfolio of 100 transmission and distribution projects. The government also hopes to increase the share of clean energy to 40 percent by 2030, up from around 22 percent at present.
The reform introduces greater opportunities for private investment in solar, wind, geothermal, and energy storage technologies, alongside smart grid and industrial efficiency solutions. The introduction of the new rules marks a U-turn from former-President Andrés Manuel López Obrador’s policy of energy nationalisation, which was widely criticised for its strong emphasis on fossil fuels and disregard for the potential for private investment to expand the sector.
In December, Mexico’s Energy Minister Luz Elena González announced that private companies planned to invest $4.75 billion to build 20 renewable energy projects in 11 Mexican states, adding 3.32 GW of electricity generation capacity and 1.48 GW of storage capacity. Elena González said that the government planned to construct three additional solar plants and invest $2 billion in transmission infrastructure to enhance sectoral growth.
The projects, which include 15 solar power plants and five wind farms, were proposed by private firms after Mexico’s Energy Ministry (Sener) called for new solar and wind project proposals in October. A reported 98 proposals were received, with 20 approved to be constructed starting immediately, with land and permits having already been approved.
The projects will be developed countrywide, in the states of Campeche, Hidalgo, Yucatán, Guanajuato, Oaxaca, Tamaulipas, Quintana Roo, Puebla, Veracruz, Zacatecas and Querétaro. Most of the projects are expected to commence operations in 2028 and 2029.
Sener launched a second call for proposals for projects in February, intending to add 6.5 GW of additional electricity generation. The tender attracted 60 proposals for around six times more electricity generation than required, including from major international developers and renewable energy companies that did not participate in the October call, indicating a high level of interest in the Mexican market. Invenergy, U.S. utility AES, and London-based Cubico all submitted proposals for the mixed scheme, which are currently being assessed by CFE.
Sheinbaum hopes to organise another renewable energy tender as soon as June. “The government wants to finish the mixed scheme process in early June so they can put out another call for generation permits,” stated César Emiliano Hernández Ochoa, the managing partner at public affairs consultancy Publius. “The ministry is waiting to see what is awarded in the mixed scheme to see what space is available for the other types of projects,” he added.
In addition to plans for new renewable energy projects, several other factors are supporting Mexico’s green transition. In recent years, Mexico and Canada have deepened cooperation in sustainability, clean energy, and environmental management under a framework aligned with the USMCA free trade agreement. Mexico’s Environmental Minister, Alicia Bárcena, recently said that the two countries hope to expand trade and investment while advancing joint projects focused on sustainable development and clean energy.
The Mexico-Canada Action Plan 2026–2028 prioritises climate change, renewable energy, forestry, circular economy initiatives, and sustainable mining. Mexico and Canada aim to work together rather than compete to enhance regional cooperation and counterbalance the United States’ backtracking on climate policies under the Trump administration.
State-level action is also helping to establish a more investor-friendly environment for the energy sector. For example, the state of Aguascalientes recently signed a collaboration deal between the Aguascalientes State Energy Agency (AGEEA) and the National Commission for the Efficient Use of Energy (CONUEE) to promote energy efficiency, reduce costs, and enhance competitiveness.
After years of stagnation, Mexico is finally on its way to developing its renewable energy capacity, in line with national green transition aims. Greater private investment will help rapidly expand renewable energy deployment, while favourable national policies and state-level action will support this rollout.
By Felicity Bradstock for Oilprice.com