Overview

Renewable energy plays a significant role in Mexico's electricity generation mix, contributing 26 percent of the country's total power output. As of 2009, the renewable energy portfolio in Mexico comprised five primary sources: biomass, hydro power, geothermal, solar power, and wind. This diverse mix reflects a long-term strategic effort established to increase the utilization of renewable energy sources within the national grid. The Commission Federal de Electricidad (CFE) serves as the primary operator for these energy assets, managing the integration of these varied technologies into Mexico's operational energy infrastructure.

Geothermal Leadership

Mexico holds a prominent position in the global geothermal energy sector. The amount of geothermal energy used and harvested places Mexico as number four in the world. This ranking underscores the country's substantial investment in geothermal resources, which form a critical component of its renewable energy strategy alongside hydro, wind, solar, and biomass sources.

History of renewable energy policy

Mexico's renewable energy policy has evolved significantly since the early 1990s, driven by the need to diversify a historically oil and gas-dominated electricity sector. The Commission Federal de Electricidad (CFE) has remained the primary operator throughout this transition, managing a mixed portfolio that includes biomass, hydro power, geothermal, solar power, and wind. As of 2009, these sources contributed to 26 percent of electricity generation in Mexico, with geothermal energy placing the country as number four in the world in terms of usage and harvesting.

Policy Milestones

Year Event
1992 Rio Conference
2001 Revision of public electricity service law
2003 Shift from oil/gas dominance
2011/2012 Policy development phase
2020 Continued policy adjustments
2025 Recent policy updates

The long-term effort to increase the use of renewable energy sources began gaining structured momentum following the Rio Conference in 1992. This international gathering highlighted the necessity for national strategies to integrate cleaner energy mixes. In Mexico, this led to a revision of the public electricity service law in 2001, aiming to modernize the regulatory framework under the CFE. By 2003, the sector began a noticeable shift from its heavy reliance on oil and gas dominance, opening pathways for hydro, geothermal, and wind investments. Subsequent developments in 2011/2012, 2020, and 2025 have continued to refine these policies, ensuring that Mexico maintains its position as a significant global player in geothermal and other renewable technologies.

What are the main sources of renewable energy in Mexico?

Mexico’s renewable energy mix is diverse, drawing from five primary sources: hydropower, geothermal, solar, wind, and biomass. As of 2009, these sources collectively contributed 26 percent of the country’s electricity generation. The Commission Federal de Electricidad (CFE) operates as the primary operator for much of this infrastructure, managing a portfolio that reflects both historical investments and emerging technologies.

Hydropower

Hydropower represents the largest component of Mexico’s renewable capacity. The installed capacity for hydropower stands at 11603 MW. This significant figure underscores the reliance on Mexico’s river systems and topographical advantages to generate consistent baseload and peak power. Hydropower has historically been a cornerstone of the national grid, providing stability and flexibility that complements other variable renewable sources.

Geothermal Energy

Geothermal energy places Mexico in a prominent global position, ranking as number four in the world in terms of energy harvested. The country utilizes its volcanic activity, particularly in the state of Puebla, to generate 958 MW of capacity. This output accounts for approximately 9.3% of the global geothermal contribution. Geothermal plants provide reliable baseload power, distinct from the intermittent nature of wind and solar, making them critical for grid stability.

Solar and Wind Power

Solar and wind power are key components of Mexico’s long-term effort to increase renewable usage. While specific capacity figures for these two sources are not detailed in the immediate 2009 snapshot, they are recognized as essential pillars of the mixed fuel strategy. The expansion of wind farms, particularly in coastal regions, and solar installations leverages Mexico’s diverse climatic conditions to diversify the generation mix.

Biomass

Biomass energy has seen a significant shift in its relative contribution over the decades. In 1965, biomass accounted for 19.5% of electricity generation. By 2005, this share had declined to 5.3%. This decrease reflects the growing dominance of other sources, such as hydropower and geothermal, as well as the expansion of fossil fuel usage during that period. Despite the decline in percentage share, biomass remains one of the five main sources identified in the national renewable framework.

Future targets and challenges

Mexico has established a structured long-term effort to increase the use of renewable energy sources, setting specific government targets for electricity generation. The policy framework outlined goals to reach 25 percent by 2018, 30 percent by 2021, and 35 percent by 2024, with an ambitious target of 50 percent by 2050. These targets are part of the broader national strategy to diversify the energy mix beyond the existing contributions of biomass, hydro power, geothermal, solar power, and wind.

Emissions pledges and projections

The national energy strategy aligns with the country's International Nationally Determined Contribution (INDC) pledge to reduce greenhouse gas emissions by 40 percent by 2030. Achieving this reduction relies heavily on the expansion of the renewable sector, which currently contributes 26 percent of electricity generation. However, predictions for the sector's growth vary. Some projections estimate that renewable energy will reach 35 percent of generation by 2035, while other forecasts suggest a slower pace, with only 21 percent by 2030. These differing predictions highlight the uncertainty surrounding the speed of adoption and the impact of policy implementation on the grid.

Structural and economic challenges

Despite the clear targets, the sector faces significant structural and economic challenges. One major hurdle is the high import taxes on solar panels, which increase the cost of solar power projects and can slow down deployment. There is a recognized need for local manufacturing to mitigate these costs and strengthen the domestic supply chain. The Commission Federal de Electricidad (CFE) plays a central role in navigating these challenges as the primary operator. The success of the long-term effort depends on addressing these economic barriers and maintaining the momentum required to meet the 2050 target of 50 percent renewable generation.

Why it matters

Mexico’s renewable energy landscape is defined by a distinctive mix of established technologies and emerging investments, contributing 26 percent of the nation’s total electricity generation. This significant share underscores the country’s strategic position within Latin America, where it serves as a leading example of balancing a deep-seated fossil fuel heritage with sustainable innovation. The operational framework is anchored by the Commission Federal de Electricidad (CFE), which manages a diverse portfolio that includes biomass, hydro power, geothermal, solar power, and wind energy sources.

Global Leadership in Geothermal Energy

A defining feature of Mexico’s renewable profile is its exceptional utilization of geothermal resources. The amount of geothermal energy used and harvested places Mexico as number four in the world, a distinction that highlights the country’s capacity to leverage specific geographic advantages for large-scale power production. This ranking reflects decades of long-term effort established to increase the use of renewable energy sources, particularly in regions with high volcanic activity where geothermal potential is most pronounced. The integration of geothermal power into the national grid provides a stable, baseload renewable energy source that complements more variable technologies like wind and solar.

Strategic Balance in Latin America

As a leading example of renewable energy investment in Latin America, Mexico demonstrates how a major energy producer can diversify its generation mix without abandoning its traditional strengths. The country’s approach involves a coordinated effort to expand capacity across multiple renewable sectors, ensuring that growth is not reliant on a single technology. This diversified strategy helps mitigate risks associated with fuel price volatility and climate variability, offering a model for other emerging economies in the region. The continued operational status of these renewable assets, under the stewardship of the CFE, signals a sustained commitment to integrating sustainable innovation into the broader energy infrastructure.

See also