LATAM Market

Latam Report

ACE has an established network of consultants with expertise in Latin America, from Mexico to Central America and South America. While slower than other developing regions, Latin America’s energy transition is underway, with unconventional renewables—namely solar, wind, and geothermal—growing their share in countries’ energy mixes. Chile, Uruguay, and Costa Rica are leading the transition to green energy and have invested heavily in unconventional renewable energy. The push to become carbon-neutral is embraced by most government policies, helping to accelerate the global energy transition. But troubling challenges remain. The region’s dependence on China is at an all-time high as it struggles to move up the value chain. Moreover, COVID-19 has reversed decades of employment gains, forcing millions of Latin Americans into poverty. As economic and social frustration builds, large-scale government projects will be challenging to finance. AMLO and Bolsonaro, the populist leaders from Mexico and Brazil, also use their increased popularity to impose disruptive policies in a vulnerable energy sector.


According to World Data, the total production of electric energy-producing facilities in Mexico is 303 bn kWh. This is 117% of the country’s usage, yet Mexico trades energy with foreign countries. Production, imports, and exports are essential in pure consumption. Natural gas and crude oil are also used as energy sources. As a result, energy demand will increase significantly because energy use in Mexico is still relatively low: electricity use per capita is only 30%, and TPES 40% of the IEA average. Per North American Development Bank, renewable energy will account for almost 4% of gross power production in Cepeda, Coahuila, while the percentage of coal-fired power generation will drop from 90.12% to 86.75%. In addition, Mexico’s industrial sector is one of the largest energy consumers in the country; with the widespread availability of clean energy, companies in diverse sectors can either buy cheaper energy from solar farms or resort to traditional energy generators for their power.

an image of the Mexico map

Mexico Energy Market

The Lopez Obrador administration repealed the Mexican Energy Market (MEM) through national supreme courts. According to Reforma Electríca, (El País, April 6, 2022), executives will be distributed back to the Comisión Federal de Electricidad (CFE).

As a result, Mexican government-owned power plants will prefer private competitors, squashing the qualified supplier and scheduling programs under MEM. The law establishes that the government must give preference to electricity from government power plants. Additional electricity can be purchased from private wind, solar, and natural gas plants only if demand requires it.

The repeal will give all discretionary powers back to the CFE. Theoretically, under the repeal, CFE’s capabilities will exceed the
Comisión Reguladora de Energía (CRE) as they did before the MEM program.

Background – Before 2013, Mexico’s state-owned energy company, Pemex, controlled Mexico’s energy supply. After energy reform policies in 2014, the Mexico energy market opened to private competition. Despite large reserves, Mexico’s production of gas and oil declined due to a lack of modern technologies and offshore drilling exploration. Where the Mexican government lagged behind, foreign investments took hold, and a new era in energy procurement blossomed.

Mexican Energy Monopoly

Before the reform, Mexico closed its energy monopoly to competition, which proved counterproductive to developing infrastructure, improving services, energy pricing, and servicing.

Energy Exportation & Importation

In 1996, Bose was the first company to import energy from the United States to San Luis Rio in Colorado, Sonora, creating a precedent for competitive energy

Authorization Export Permits

The Authorization Export Permit (AEP) program under the Department of Energy and the post-NAFTA tri-national agreement was an oasis for maquiladora plants operating adjacent to the Baja

AEP Accomplishments

ACE is the only US consulting firm that provides expertise on the energy exchange program for Mexican maquiladoras in both the Baja Norte region and the interior

Competitive Landscape

Mexico’s recent repeal will limit the competition platform—one of the main benefits of deregulation. After the repeal goes into effect, maquiladoras and Mexican-owned companies

Mexico Electrical Grid

According to, “Mexico’s National Electric System (Sistema Eléctrico Nacional or SEN) is one of the largest in the Western Hemisphere. It is comprised of nine regions

BESS Revolution

Maquiladoras and Mexican-owned industries are turning to storage to address their resiliency and demand costs. In 2018, Atlas Clean Energy introduced storage


A viable option is microgrid technology, or an island model, to separate from the grid and end reliance on government energy. ACE can provide modeling and comprehensive studies to determine

Border States

Mexico border states are adjacent to the United States and are the primary hubs for maquiladora manufacturing due to easy border-crossing access for
imports and exports. Therefore, there is a higher density of energy consumption in these border regions, coupled with opportunities and issues related to
energy supply and electrical grid resilience.

Statistically, these maquiladoras represent three times as much energy consumption as the non-border Mexican states.

The consumption of energy in these maquila states is an important driver to determine future power plant needs or other energy assets. For instance,
Baja California Norte’s summer deficit is unable to procure the needed energy for its manufacturing plants and residences.
To make matters worse, many energy companies are experiencing rolling blackouts, which affects their supply chain and eventually leads to other
economic issues.

There are over 6,000 energy-intensive maquiladoras spread throughout the US-Mexican border states with a growing demand for uninterrupted energy
distribution, coupled with resiliency and grid stability.

Baja California Norte (BCN)

BCN has been experiencing an energy deficit for the past several years, and the crisis continues to worsen, especially during the summer. BCN purchases energy aggressively across

Sonora (SON)

Sonora (SON) is another underserviced region in terms of energy and grid reliability. According to SPG Global, the Mexican government approved over $100 million in solar projects

Chihuahua (CHI)

Chihuahua (CHI) is situated in a prime geographical location due to its proximity to New Mexico and Texas. Both US states are providers of natural gas and

Coahuila (CO)

Coahuila (CO) is the largest producer of coal in the country; however, due to legal restrictions, it is not allowed to make use of the energy potential

Nuevo Leon (NL)

According to Jorge Gorozpe, Energy Director at the Ministry of Economy and Labor of Nuevo Leon (SEyTNL), “Nuevo Leon doubled its energy production and is now the

Tamaulipas (TMP)

Tamaulipas is an important region for logistics and foreign trade. According to its secretary of economic development, Carlos Garcia, Tamaulipas is ranked first in both land and

Qualified Suppliers & Schedulers

Atlas works with some of the most reliable scheduling teams in Mexico and the United States, specifically California (CAISO) and Texas (ERCOT). The scheduling platform exports