What is Mexico's pathway to limit global warming to 1.5°C?
Power
Decarbonising the power sector
In 2022, fossil gas accounted for 57% of Mexico’s electricity generation. Across all our assessed 1.5°C pathways, gas is phased out by 2035. The implementation of stringent policies in the near term will be key to supporting such a steep decrease in fossil gas over the coming decade. It is critical to develop a clear roadmap for the phase out of gas. Plans to increase domestic gas production are incompatible with 1.5°C aligned pathways.1
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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The Deep Electrification pathway envisions a rapid ramping up of renewables deployment due to declining costs of renewables and strong policy intervention. This pathway shows the share of renewables rapidly increase from 25% in 2022 to 86% in 2030. As renewables rise, the share of gas decreases and is ultimately phased out in the early 2030s. The Minimal CDR Reliance pathway, which reduces reliance on expensive carbon dioxide removal technologies, sees the share of renewables reach 89% by 2030.
Across both the Deep Electrification and Minimal CDR Reliance pathways, hydrogen is gradually introduced into the system as gas is phased out. By 2040, hydrogen accounts for 4–5% of power generation. Mexico is currently developing a national hydrogen strategy and is directing USD 21 bn towards developing a green hydrogen industry.2,3
Plans to increase the share of renewables in the electricity mix to 45% by 2030 are a positive step compared to earlier government policy which had cancelled successful renewables auctions.4,5 However, this still falls short of 1.5°C aligned pathways.
Mexico’s National Energy Plan will direct USD 23.4 billion towards scaling up renewables and improving grid infrastructure.6 54% of this will be supplied by the state utility, while the remaining 46% will be met through private investment.
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
In 2024, Mexico’s power system included 19 GW of installed wind and solar capacity, as well as nearly 13 GW of hydro and 2 GW of bioenergy and geothermal capacity.7
1.5°C aligned pathways show a rapid increase in wind and solar capacity. The Net Zero Commitments pathway shows installed wind and solar capacity increasing to 154 GW in 2030 and 308 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.8
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 (57%), followed by wind (32%), with a smaller share going to other renewables. Over time, investments would decrease to USD 6 billion/yr between 2031-2040, and USD 3.5 billion/yr 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 heavily indebted national energy company, which continues to invest considerably in fossil fuels.9 Between 2025–2030, Pemex plans to spend USD 112 billion on oil and gas exploration.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 These figures are well above what is required to scale up renewables in line with 1.5°C.
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. Achieving its 45% target alone will save Mexico USD 1.6 billion/yr in gas imports and create 434,000 jobs.12 Nevertheless, as a developing country it can be expected that some of these costs will be funded with international support.
Our data does not include costs related to energy storage and grid upgrades. The Mexican government is investing USD 8.2 bn in expanding its transmission network.13
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 |
2022
|
2030
|
2035
|
2040
|
2050
|
Power sector decarbonised by
|
|---|---|---|---|---|---|---|
|
Carbon intensity of power
gCO₂/kWh
|
367
|
41 to
58
|
-7 to
0
|
-11 to
0
|
-14 to
0
|
2034 to
2035
|
|
Relative to reference year in %
|
-89 to
-84%
|
-102 to
-100%
|
-103 to
-100%
|
-104 to
-100%
|
| Indicator |
2022
|
2030
|
2035
|
2040
|
2050
|
|---|---|---|---|---|---|
|
Share of unabated coal
%
|
7
|
1 to
1
|
0 to
0
|
0 to
0
|
0 to
0
|
|
Share of unabated gas
%
|
57
|
4 to
6
|
0 to
0
|
0 to
0
|
0 to
0
|
|
Share of renewable energy
%
|
25
|
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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