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Energy modernization in Mexico: renewables and boosting electricity

07/04/2026

The Central American nation is decisively advancing in the renewal and updating of its energy model, a key opportunity for it to strengthen its resilience, enhance efficiency, and ensure sustainability through expanded renewable integration initiatives.

Mexico is going through an energy transformation that’s driven by the increasing adoption of renewable sources that strengthen the sustainability of the National Electricity System (SEN). However, this integration requires long-term planning, significant economic investments, and operational changes that ensure stability.

The roadmap isn’t accidental: the Ministry of Energy (SENER) and the instruments used to organize the sector, such as the Program for the Development of the National Electricity System (PROSEDEN), are marking the way forward. It’s based on the identification of capacity needs, demand projection, and the prioritization of investments in transmission and distribution to integrate the new generation.

PRODESEN compiles the set of programs that guide the installation and removal of obsolete power plants, as well as the modernization of the network, as indicated in the Electric Sector Outlook 2023-2037. Proper planning allows for efficient coordination of public and private investment, while avoiding bottlenecks that hinder the supply of renewable energy to areas of greater demand.

 

Updating infrastructure and operations

One of the most effective strategies to increase the integration of renewable energies is to expand transmission capacity and optimize the management of distribution networks. The National Energy Control Center (CENACE) and the Federal Electricity Commission (CFE) have presented expansion and modernization programs that include strengthening the National Transmission Network (RNT), installing new substations, automating infrastructure, and developing smart grids capable of operating remotely and responding quickly to contingencies. The modernization of the sector also incorporates communication systems and real-time operating platforms that reduce losses, improve fault detection, and facilitate the integration of distributed generation, such as solar roofs or microgrids.

The day-to-day operation of the National Electricity System (SEN) must adjust to the inherent variability of solar generation and wind. According to the CENACE Reference Generation Technology Report, this requires greater flexibility in thermal units, the deployment of auxiliary services, advanced weather forecasting systems, and backup and storage mechanisms.

The study analyzes how these measures facilitate the incorporation of renewable energies without compromising reliability and emphasizes that investment in storage is crucial to ensure supply and rapid response when demand exceeds variable production.

 

Projects and programs in progress

Despite the growth of renewable energy, the Mexican electricity system continues to rely heavily on fossil fuels. The International Energy Agency (IEA) highlighted the high usage of natural gas, which underlines the need to accelerate investments that allow for the gradual replacement of these fuels with renewable sources. This transition would reduce emissions and decrease dependence on imported energy, but it requires significant coordination in planning, regulation, and market design.

The Federal Electricity Commission has presented initiatives to expand and modernize the general distribution networks, with an emphasis on automation, loss reduction, and improvement in service continuity, the replacement of obsolete infrastructure, the digitalization of control and planning centers, as well as the integration of microgrids in vulnerable areas. Overall, these performances strengthen resilience against peak demand and extreme weather events.

Various organizations, including the International Renewable Energy Agency (IRENA), have documented the remarkable increase in renewable capacity in Mexico — particularly in wind, solar, and geothermal generation— and highlight the opportunity that the current competitive costs of technology represent to accelerate the transformation of the generation fleet. All of this creates a favorable scenario to advance more quickly in the energy transition.

 

Where the sector is going

The Mexican energy sector is in the midst of a process of comprehensive modernization. According to CENACE, the Federal Electricity Commission, and the government, several key steps will be necessary to complete this transformation:

  • Accelerate investments in transmission and storage, concluding evacuation corridors and developing battery programs.
  • Implement automations and other digital tools that modernize control centers and deploy smart distribution networks.
  • Strengthen regulatory coordination by aligning expansion plans with financial instruments and regulatory frameworks that facilitate competitive investments.
  • Design incentives that promote operational flexibility, ensuring resources capable of compensating for the variability of renewable energies.
  • Promote greater private investment to expedite the execution of projects without compromising the security of supply.

In summary, the modernization of the Mexican electricity system constitutes a strategic and technical process that goes far beyond the installation of solar panels or wind turbines. It requires comprehensive planning, sustained investments, the implementation of advanced digital technologies, and a market framework that facilitates flexibility and energy support.

The good news is that, if executed in a coordinated manner, the integration of renewable energies can fundamentally transform the national electricity matrix, thereby reducing harmful emissions and increasing efficiency and resilience of service. Everything points to Mexico moving in the right direction towards a full energy transition.

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