Beatrice Lang
Mexico currently provides a small amount of electricity to Southern California, with power plants in Baja California supplying demand in the San Diego area. However, this could increase in the future as Mexico has plans to connect Baja California to its national grid, which would result in a surplus of electricity that could be exported to the US. Additionally, the Department of Energy has recently issued a permit for the construction of a transmission line across the US-Mexico border, which will supply electricity from a Mexican wind farm to California.
| Characteristics | Values |
|---|---|
| Electricity trade between Mexico and the US | A small fraction of total US electricity use |
| Electricity trade between Southern California and Mexico | Exists, with electricity imported from Mexico to supply demand in the San Diego area |
| Electricity trade between Mexico and California, New Mexico, and Texas | Exists where transmission lines cross the border |
| Ownership of Mexico's electricity sector | Federally owned, with the Comisión Federal de Electricidad (CFE) controlling the sector |
| Private participation in Mexico's electricity sector | Allowed through specific service contracts |
| Mexico's National Power System (SEN) | One of the largest in the Western Hemisphere, with nine regions, including a binational electricity system in Baja California |
| Mexico's electricity consumption in 2022 | 333,662 GWh, an increase of 3.4% from 2021 |
| Mexico's installed capacity in 2022 | 87,130 MW, an increase of 1.3% from 2021 |
| Mexico's total installed capacity in 2022, including interconnected power generation plants and distributed generation | 92,503 MW |
| Mexico's electricity generation mix in 2022 | 31.2% from clean energy sources, 68.8% from fossil fuels |
| Mexico's solar potential | Estimated at 5 kWh/m2 daily, 50 times the national electricity generation |
| Mexico's wind power production | Limited, but with high potential |
| Mexico's renewable energy law | Creates a fund for the energy transition and sustainable use of energy |
| Mexico's energy reform | Has spurred larger-scale cross-border electricity transmission with the US |
| Mexico's energy goals | To guarantee universal access to electricity and contribute to social and economic development |
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What You'll Learn
Mexico's electricity sector is federally owned
The electricity sector in Mexico underwent a significant reorganization in the 1930s, with the creation of the National Electricity Code and the Federal Electricity Commission (CFE). The CFE, a state-owned and state-financed enterprise, came to dominate all investment in new capacity. In 1960, a constitutional amendment nationalized the electricity industry, giving the government exclusive responsibility for generating, transmitting, transforming, and distributing electricity. This amendment further solidified the government's control over the sector.
While the generation sector was opened to private participation in 1992, the CFE remains the dominant player with two-thirds of the installed capacity. Private generators are not allowed to sell directly to users and must sell their output to the CFE, which maintains a commercialization monopoly. The CFE's Business Plan is aligned with the government's priority to support the CFE in maintaining its leadership position in the electricity market.
The CFE has ten subsidiaries, five affiliated companies, and four business units. It also owns the transmission and distribution system and can contract with third parties to build and own infrastructure under its contract. The CFE is committed to modernizing the electrical system, including expanding transmission and distribution networks and developing new power plants, including renewable energy sources.
Mexico's National Power System (Sistema Eléctrico Nacional or SEN) is one of the largest in the Western Hemisphere, serving over 125 million inhabitants and the state private industry. The SEN is comprised of nine regions, including a binational electricity system in Baja California, which is linked to California through the Western Interconnection. This binational system allows for a small amount of electricity trade between Southern California and Baja California, with electricity generally imported from Mexico to supply demand in the San Diego area.
Mexico is also working to develop renewable energy sources and increase interconnections with the U.S., which could further increase electricity trade between the two countries.
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US-Mexico electricity trade is small
Between Southern California and Baja California, electricity is generally imported from a few power plants on the Mexican side to supply demand in the San Diego area. A small portion of the Baja California, Mexico, grid participates in the Western Electric Coordinating Council, which covers the western United States as well as Alberta and British Columbia in Canada.
At even lower voltage levels, a few ties connect southern and western Texas with the Mexican states of Tamaulipas and Chihuahua. However, these ties are asynchronous, meaning that the transmission systems on either side can operate independently.
The flow of electricity between the two countries is expected to increase in the future. The US Department of Energy recently issued a presidential permit for the construction of a 230-kilovolt (kV) transmission line across the border. This line will supply electricity from a Mexican wind farm to California.
Mexico has also been working to develop renewable energy sources and increase interconnections with the US. The country has the potential to become a clean energy powerhouse, with an abundance of solar energy resources. The Puerto Peñasco plant, for example, is a solar power facility in the northern Mexican state of Sonora that aims to provide power to both Mexico and the US.
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Mexico's solar energy potential
Mexico has a large and diverse renewable energy resource base, with high solar radiation, wind capacity, and geothermal sources. The country's solar capacity reached 10GW at the end of 2021, and solar resources in Mexico are among the best in the world, with annual daily solar irradiance levels ranging between 4.4 kWh/m2 and 6.3 kWh/m2. The country has one of the largest National Power Systems in the world, serving over 125 million people, and the government has committed to guaranteeing universal access to electricity.
Mexico's well-developed solar power industry is expected to grow over the next decade, driven by favourable government policies, strong renewable energy policies, and several national solar power programs. The government has extended a simple permit procedure for solar projects of a 500 kW to 2 MW capacity and offers several subsidies for solar systems. Systems below 500 kWp do not need any permitting and can reduce energy spending by up to 40%. With the high cost of electricity, many are being encouraged to convert their systems to solar, and the market is expected to grow by 10-15% annually through 2025.
Mexico has more than 60 utility-scale solar parks across 15 states, with a combined investment of over $8 billion. The country's first tangible product of a sustainable energy initiative is the Puerto Peñasco plant, which is part of the Sonora Plan. This involves the construction of five massive photovoltaic solar facilities, new transmission lines, and a lithium mining venture in the northern state of Sonora. The second stage of the Sonora Plan involves transmitting part of the generated capacity to the Baja California circuit, which is separate from the rest of Mexico.
Mexico's renewable energy goals are ambitious, aiming for 35% renewable energy by 2025 and 50% by 2050. Solar energy is expected to make up 6-7% of energy consumption by 2030. The country's diverse renewable energy resource base could support significant growth in clean generation capacity, with enough national technical potential to meet the country's electricity needs a hundred times over.
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Transmission lines across the border
Mexico currently provides a small amount of electricity to Southern California. This electricity trade represents less than a hundredth of a percent of total US electricity use. However, the flow of electricity from Mexico to the US could increase in the future.
The electricity that Mexico supplies to Southern California is imported from a few power plants on the Mexican side of the border. This electricity is used to supply the demand in the San Diego area. The transmission lines that cross the border are asynchronous, meaning that the transmission systems on either side can operate independently.
There are currently 11 sets of transmission lines that straddle the Mexico-US border. These transmission lines are part of a binational electricity system in Baja California, which is overseen by the Western Electricity Coordinating Council (WECC). The WECC covers the western United States, as well as Alberta and British Columbia in Canada.
In addition to the existing transmission lines, there are plans to construct a 230-kilovolt (kV) transmission line across the US-Mexico border. This transmission line will be owned and operated by a subsidiary of Sempra International and will supply electricity from a Mexican wind farm to the California market.
Mexico has also proposed a multi-pronged plan to power California and Arizona with solar energy generated across the border. This plan involves the construction of five massive photovoltaic solar facilities, new transmission lines, and a lithium mining venture in the northern Mexican state of Sonora. The first stage of this plan is to provide solar power to the national electricity system in Mexico, while the second stage would involve transmitting part of the generated capacity to the Baja California circuit.
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The future of a unified Mexico-US electric grid
Mexico currently provides a small amount of electricity to Southern California. However, the flow of electricity from Mexico to the United States could increase in the future, as there is interest and ongoing work towards a unified Mexico-US electric grid.
Current State of the Mexico-US Electric Grid
Mexico and the US have a small electricity trade, with transmission lines crossing the border in California, New Mexico, and Texas. A few power plants on the Mexican side of the border supply electricity to the San Diego area. Additionally, a small portion of the Baja California, Mexico, grid participates in the Western Electric Coordinating Council, which covers the western United States and parts of Canada. There are also asynchronous ties connecting southern and western Texas with the Mexican states of Tamaulipas and Chihuahua, allowing the transmission systems on either side to operate independently.
Future Prospects for a Unified Mexico-US Electric Grid
There is growing interest and support for the development of a unified North American electricity grid, including Mexico, the United States, and Canada. Mexico's energy reform, which opened its electricity market to foreign companies in 2014, has paved the way for larger-scale electricity transmission between Mexico and the US. There are currently 11 sets of transmission lines crossing the Mexico-US border, and efforts are being made to expand this footprint.
Mexico's National Development Plan 2019-2024 aims to promote sustainable development by incorporating renewable energy sources, which will be crucial for providing electricity to small and isolated communities. This plan includes the Sonora Plan, which involves the construction of solar facilities, transmission lines, and a lithium mining venture in the northern Mexican state of Sonora. The successful implementation of this plan could result in surplus electricity that could be exported to the US, particularly to California and Arizona.
The US has also shown interest in expanding and upgrading its transmission network through initiatives like the Macro Grid Initiative, which aims to build support for a modern Macro Grid that can deliver economic and environmental benefits. Additionally, the US has seen significant interest from companies seeking to supply projects to Mexico's Comisión Federal de Electricidad (CFE), further strengthening the prospects for a unified grid.
Challenges and Opportunities
One challenge to a unified grid is the cost of electricity in Mexico, which is among the highest in the hemisphere. However, initiatives like FIDE's program, which promotes the use of clean energy sources and provides incentives for acquiring photovoltaic systems, can help reduce costs and increase system reliability. Additionally, Mexico's abundant solar energy resources can drive the development of clean energy exports, further enhancing the potential for a unified grid.
While a fully unified Mexico-US electric grid may still be a ways off, the increasing interconnections and collaboration between the two countries bode well for the future. The integration of renewable energy sources and the modernization of transmission infrastructure will be key factors in achieving a more robust and sustainable electricity grid that can meet the growing demands of both countries.
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Frequently asked questions
Yes, Mexico provides a small amount of electricity to Southern California, specifically to the San Diego area.
There are transmission lines that cross the border between Southern California and Baja California. A few power plants on the Mexican side supply electricity to the San Diego area.
Mexico has a large potential for solar, wind, and biomass resources. However, currently, the electricity sector in Mexico relies heavily on thermal sources (75% of total installed capacity) and hydropower generation (19%).
Yes, the flow of electricity from Mexico to the United States is expected to increase. The Department of Energy has issued a permit for the construction of a 230-kilovolt transmission line across the border. This line will supply electricity from a Mexican wind farm to California. Additionally, Mexico has plans to connect Baja California to its national grid, which could result in an excess of electricity that could be exported to the United States.
