Mexico Power Market - Growth, Trends, and Forecasts (2020 - 2025)
The Mexico power market is expected to grow at a CAGR of more than 2.5% in the forecast period of 2020-2025. With a growing population, the demand for power is increasing tremendously. Adding to this, factors such as rapid urbanization, technical advancement, and industrialization is increasing the demand for electricity. With the acceptance of renewable energy sources, a robust grid development is required, which is expanding the distribution and transmission sector of the power market. On the other hand, considerable investments in upgrading and developing new generation transmission or distribution networks are hindering the growth of the power market in Mexico.
- Although the share of oil in the power market of Mexico is decreasing, it still holds more than 44% share in terms of total primary energy supply, in 2018, followed by natural gas with increasing share.
- Renewables are going to be the future of the power sector. With a rapidly increasing share of renewables and replacing coal and oil from the market, drastic change in the power industry is expected due to the deployment of renewable technology.
- The actions of the Mexican government towards foreign investments in the energy sector are going to be a crucial factor in predicting the future of the power industry in Mexico. The non-reluctancy of government towards foreign investment can push back the growth of the power market.
Key Market Trends
Thermal Energy Major Source of Energy
- Power generation uses a variety of sources ranging from fossil fuels like coal, oil and renewable sources like wind and solar. The energy mix for electricity generation is dominated by fossil fuels like coal, oil, and natural gas, with over 83% of the country's energy mix.
- The power generation mix is heavily skewed toward natural gas with a major contribution because of cheaper domestic fuel availability. Its share in the mix has increased over the years due to constraints in adding other conventional generation sources like hydro, nuclear, and oil.
- In 2018, energy consumption in Mexico fell by 1.3%, the sharpest decline in over two decades after growing by 0.6% in the last five years.
- Owing to the above-mentioned scenario, the Mexico power market is dominated by power generation from thermal energy, over the study period.
Challenges In Upgrading Transmission Network
- The transmission system establishes the link between the source of generation on one side and distribution system, which is connected to load / ultimate consumer, on the other side. Transmission planning is a continuous process of identification of transmission system addition requirements, timing, and need.
- Mexico has adequate power generation capacity, but it has some proportion of the population having limited access to electricity because of a lack of proper transmission network and infrastructure. To achieve the target of electricity, there is a demand for transmission networks and hence driving the power market.
- With the growth in renewables, especially wind energy, which is located remotely, new transmission lines are needed to be installed, which is a robust task operationally and financially as well.
- The opposition of government for renewables, even being the cheapest source of energy, is pushing the oil market forward but reducing the chances of meeting the targets of the Paris Climate accord.
- With the development of power sources, either conventional or renewable, there is a high demand for the development of a distribution system. The government is required to take bold steps at a fast pace to meet the county’s power requirement.
The Mexico power market is partially fragmented. The major companies include Enel S.p.A., Comision Federal de Electricidad, Iberdrola SA, Acciona SA, Petroleos Mexicanos, and others
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- 1 INTRODUCTION
- 1.1 Scope of the Study
- 1.2 Market Definition
- 1.3 Study Assumptions
- 2 RESEARCH METHODOLOGY
- 3 EXECUTIVE SUMMARY
- 4 MARKET OVERVIEW
- 4.1 Introduction
- 4.2 Electricity Generation Mix, 2019
- 4.3 Mexico Renewable Energy Installed Capacity and Forecast, in Megawatts (MW), till 2025
- 4.4 Recent Trends and Developments
- 4.5 Government Policies and Regulations
- 4.6 Market Dynamics
- 4.6.1 Drivers
- 4.6.2 Restraints
- 4.7 Supply Chain Analysis
- 4.8 PESTLE Analysis
- 5 MARKET SEGMENTATION
- 5.1 Generation
- 5.1.1 Thermal
- 5.1.2 Hydroelectric
- 5.1.3 Renewable
- 5.1.4 Others
- 5.2 Transmission and Distribution
- 6 COMPETITIVE LANDSCAPE
- 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
- 6.2 Strategies Adopted by Leading Players
- 6.3 Company Profiles
- 6.3.1 Enel S.p.A
- 6.3.2 Comision Federal de Electricidad
- 6.3.3 Iberdrola SA
- 6.3.4 Acciona SA
- 6.3.5 Petroleos Mexicanos (PEMEX)
- 6.3.6 Schneider Electric SE
- 6.3.7 Sempra Energy
- 6.3.8 Siemens Gamesa Renewable Energy S.A.
- 7 MARKET OPPORTUNITIES AND FUTURE TRENDS