What is Mexico's pathway to limit global warming to 1.5°C?
Power
Decarbonising the power sector
Mexico’s power sector is dominated by fossil gas, which accounted for 59% of the fuel mix in 2021. The Deep Electrification pathway envisions a rapid ramping up of renewables deployment due to declining costs and strong policy intervention. This pathway shows the share of renewables rapidly increase from 19% in 2021 to 86% in 2030. As renewables rise, the share of gas decreases and is ultimately phased out in 2034.
Mexico's power mix
terawatt-hour per year
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Graph description
Power energy mix composition in generation (TWh) and capacities (GW) for the years 2030, 2040 and 2050 based on selected IPCC AR6 global least costs pathways. Selected countries include the Stated Policies Scenario from the IEA's World Energy Outlook 2023.
Methodology
Data References
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In the Minimal CDR Reliance pathway, gas would be phased out even earlier (by 2032), with the share of renewables already reaching 89% by 2030. The power sector could be fully decarbonised by 2035 under this pathway. The implementation of stringent policies in the near term will be key to supporting such a steep decrease in fossil gas over this decade.
Despite this, the previous administration cancelled successful policy instruments, such as auctions, which had led to the creation of 65 wind and solar power plants, with fossil fuel generation prioritised over cheaper renewables.1
In October 2024, President Claudia Sheinbaum announced her intention to increase the share of renewables in the electricity mix to 45% by 2030 – however, this still falls short of 1.5°C aligned pathways.2 The new National Energy Plan will direct USD 23.4 billion towards scaling up renewables and improving grid infrastructure.3 54% of this will be supplied by the state utility, while the remaining 46% will be met through private investment. However, Mexico continues to invest in fossil gas power plants to meet electricity demand, which runs counter to a 1.5°C compatible power sector.4
Mexico's power sector emissions and carbon intensity
MtCO₂/yr
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Graph description
Emissions and carbon intensity of the power sector in selected 1.5°C compatible pathways.
Methodology
Data References
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Power capacity investments
Despite huge renewable energy potential, investment in renewables has dropped off in recent years as Mexico has pursued a fossil fuel intensive energy policy.5,6,7 In 2023, Mexico had 18 GW of installed wind and solar capacity, as well as nearly 13 GW of hydro and 2 GW of bioenergy and geothermal capacity.8 Under the 1.5°C compatible pathways analysed here, the vast majority of projected renewable capacity is comprised of wind and solar.
The Net Zero Commitments pathway shows installed wind and solar capacity increasing to 135 GW in 2030 and 292 GW in 2050. Considering that Mexico has a technical potential of 25,000 GW of solar and 3700 GW of wind, 1.5°C compatible pathways harness only a fraction of the country’s renewable energy potential.9
Directing investment to renewable energy projects is key to unlocking this potential. Achieving the Net Zero Commitments pathway involves investing USD 14 billion annually in renewables between 2026-2030. The majority of this would be directed towards solar, followed by wind, with a smaller share going to other renewables. Over time, investments would decrease to USD 4.7 billion annually between 2031-2040, and USD 2.5 billion annually between 2041-2050 after much of Mexico’s fossil fuel capacity has been displaced.
Mexico currently spends vast amounts of public money on Pemex, its national energy company, which continues to invest considerably in fossil fuels and is heavily in debt.10 According to the International Monetary Fund, in 2022 Mexico spent USD 98 bn on fossil fuel subsidies (both explicit and implicit) – one of the highest shares in the world.11 Pemex also set aside USD 18 bn for fossil fuel exploration and production in 2022.12
Redirecting fossil fuel investments towards renewable energy can place Mexico’s power sector on a 1.5°C compatible trajectory without relying on new revenue streams to fund the transition. Nevertheless, as a developing country it can be expected that some of these costs will be funded with international support.
Mexico's renewable electricity investments and capacities
Billion USD / yr
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Graph description
Average annual investments in power sector renewable electricity capacity and cumulative installed power capacities across time under 1.5°C compatible pathways downscaled at country levels.
Methodology
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1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for Mexico
| Indicator |
2021
|
2030
|
2035
|
2040
|
2050
|
Decarbonised power sector by
|
|---|---|---|---|---|---|---|
|
Carbon intensity of power
gCO₂/kWh
|
410
|
41 to
58
|
-7 to
0
|
-11 to
0
|
-14 to
0
|
2034 to
2035
|
|
Relative to reference year in %
|
-90 to
-86%
|
-102 to
-100%
|
-103 to
-100%
|
-103 to
-100%
|
| Indicator |
2021
|
2030
|
2035
|
2040
|
2050
|
|---|---|---|---|---|---|
|
Share of unabated coal
per cent
|
5
|
1 to
1
|
0 to
0
|
0 to
0
|
0 to
0
|
|
Share of unabated gas
per cent
|
59
|
4 to
6
|
0 to
0
|
0 to
0
|
0 to
0
|
|
Share of renewable energy
per cent
|
19
|
86 to
89
|
94 to
98
|
94 to
98
|
93 to
99
|
BECCS are the only Carbon Dioxide Removal (CDR) technologies considered in these benchmarks
All values are rounded
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Methodology
Data References
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