Latin America Advisor
Energy Advisor
A Publication of The Dialogue
What Does a Major Energy Reform Entail for Mexico?
Mexican President Claudia Sheinbaum will oversee the implementation of the country’s most substantial energy legislation in more than a decade. // File Photo: Mexican Government.
Mexico’s constitutional energy reform became law on Oct. 31 when a supermajority of state legislatures voted in favor of the measure to strengthen the role of state-owned Pemex and CFE, ensuring that the state controls at least 54 percent of all electricity generation. Critics say that the measure, which was a cornerstone of former President Andrés Manuel López Obrador’s legislative agenda, will hinder current President Claudia Sheinbaum’s efforts to triple Mexico’s renewable energy capacity and make the country a net energy exporter by the end of her term in 2030. What does the reform mean for Mexico’s energy sector? To what extent will the overhaul discourage private investment in future energy projects? How have investors reacted to increased state control of the energy supply, as well as the prospect of public-private partnerships with Pemex and CFE?
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Rolando Fuentes, nonresident scholar at the Baker Institute’s Center for the U.S. and Mexico: “Mexico’s constitutional energy reform represents a significant move toward increased state control over the energy sector, which may prioritize state-owned entities at the expense of private participation. While the reform seeks to bolster national energy sovereignty, it could undermine efforts to expand Mexico’s renewable energy capacity by creating a less flexible and less competitive market environment. The rigid allocation of generation capacity and the cap on renewables may impede Mexico’s transition to a sustainable energy future. Strengthening state-owned companies should be a secondary goal in energy policy…”
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About the Energy Advisor
A sister publication of the Inter-American Dialogue’s daily Latin America Advisor, the weekly Energy Advisor captures fresh analysis from business leaders and government officials on the most important developments in oil and gas, biofuels, the power sector, renewables, new technologies, and the policy debates shaping the future of energy in the Western Hemisphere and beyond. To subscribe or for more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.
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