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Overview of the New Mexican Energy Model

In 2013, Mexico undertook a historic reform in the energy sector, allowing private entities to participate in strategic areas such as hydrocarbon exploration, electricity planning, and transmission. The reform aims to attract capital, enhance technology, ensure reliable service, diversify energy sources, and reduce environmental impact. With a robust regulatory framework, it offers investment opportunities throughout the energy value chain. Private investment is encouraged in power generation, transmission, and distribution, with emphasis on enhancing efficiency, promoting competition, and modernizing infrastructure for sustainable energy development.

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Overview of the New Mexican Energy Model

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  1. Overview of the New MexicanEnergyModel

  2. CONSTITUTIONALENERGY REFORM • On 2013 Mexico reformed its Constitution in the energy sector (articles 25, 27 and 28) for the first time in the last six decades. • The exploration and extraction of hydrocarbons, the planning of the electric sector and the public service of distribution and transmission of electricity, are considered as strategic areas. • Such activities can be made through State Productive Enterprises, or contracts awarded to private entities (except for the planning). • The oil and hydrocarbons that lay in the subsoil are property of the Nation, and they will be exploited with a purpose to gain additional revenue to contribute to the Nation’s long-term development.

  3. Objectives of Energy Policies Electricity Hydrocarbons • Attract new capital and state of the art technology. • Access deep-water and non-conventional reservoirs. • Increase natural gas and oil supply. • Reduce electric rates to boost overall economic competitiveness. • Assure reliable service and guarantee universal access. • Increase system efficiency and reduce losses. Cross-cutting Sustainability and Energy Transition • Promote investment • Modernize infrastructure • Guarantee transparency • Diversify generation. • Develop renewable energies. • Reduce environmental impact.

  4. The New Hydrocarbons Model Hydrocarbons Exploration and Extraction Transportation And Storage Industrial Transformation, Distribution and Retail Contracts Permits With a stronger institutional and regulatory framework, the Reform presents good opportunities for investment throughout the value chain.

  5. The New Power Sector Model Hydrocarbons Exploration and Hydrocarbons Exploration and Extraction Hydrocarbons Exploration and Extraction Hydrocarbons Exploration and Extraction Competition PPPs Wholesale market Qualified users • Private investment is allowed in power generation and commercialization for qualified users. • Private investment is welcome in the transmission and distribution sectors, contracted by CFE. • A decentralized public entity, The National Center for Energy Control (CENACE), will control dispatch and manage the wholesale market.

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