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Framing the New Market Reality: An Outlook for Mexico’s Power Sector

Mexico Gas & Power Scenarios to 2035: A Joint Energy Narrative-Genscape Study

Energy Narrative and Genscape have collaborated to create an independent evaluation of Mexico's electricity market evolution through 2035. The study examines Mexico’s future economic growth, the pace of new investment, and technological choices to determine how these factors will impact electricity supply, demand and spot market prices. 

Framing the New Market Reality blends near-term events — such as the evolving policies of the Trump administration, NAFTA renegotiations, and Mexico’s 2018 elections — with long-term trends — including the falling cost of renewable energy technologies and investment in energy efficiency — to create a Reference Case forecast for Mexico’s electricity sector at the regional level. Three distinct sets of Sensitivity Cases examine how variations in demand growth, fuel prices, and renewable energy investment would alter the forecast.

Framing the New Market Reality melds Energy Narrative’s decades of on-the-ground experience in Mexico’s energy sector and deep expertise in scenario development with Genscape’s unparalleled Mexico gas and power data and modeling platform (EPSI). The study framework provides the best of two worlds—insight into industry drivers and future trends, and confidence in the data foundation and modeling technique behind the projections—to create a robust and practical tool for decision makers.

Key Questions Addressed in the Study:

  • How quickly will Mexico’s electricity demand grow? Which regions will grow the fastest?
  • Where will new capacity be added? What fuels and technologies will be used?
  • How successful will the industry be in meeting its targets for increased renewable energy production?
  • How high will natural gas demand be? How will changes in wind and solar capacity affect natural gas demand?
  • How will fuel prices evolve? What affect would higher or lower fuel prices have on electricity prices and power plant dispatch?
Energy Narrative-Genscape
Projected Mexico electricity consumption from 2005 to 2025. Click to enlarge

Who can benefit from it?

  • Project developers—to forecast expected revenues and identify attractive project locations
  • Retailers and industrial consumers—to formulate estimates for energy spend
  • Traders—to understand the market and the opportunities it presents
  • Equipment and service providers—to estimate market size for their products
  • Natural gas suppliers—to forecast future daily, monthly, and annual fuel demand
  • IPP operators—to compare market opportunities with their legacy CFE contracts

Study Benefits:

  • Understand Mexico’s power reform origins, current state of implementation, upcoming developments, and risks to future stages
  • Assess Mexico’s current power market fundamentals at the regional level
  • Demystify the long-term risks and benefits of today’s investment decisions
  • Confidently understand the range of potential outcomes associated with market participation

Study Components:

  • A quantified Reference Case outlook to 2035 including regional electricity demand, capacity, generation, load factor, spot prices, fuel consumption, CO2 emissions, and more  
  • Three (3) sets of quantified sensitivity cases (High/Low demand, High/Low fuel prices, and High/Low renewable energy penetration)
  • A detailed report describing Mexico’s current market structure, drivers for it future evolution, and results of the Reference Case and sensitivity cases
  • EPSI model datasets for each of the Cases, both inputs and results
Energy Narrative-Genscape
Sample scenario results, including reference and sensitivity cases. Click to enlarge

Study Enhancements:

  • Access to the EPSI platform to run internal variations on the study Cases
  • Detailed supply stack information on a plant-by-plant basis through EPSI, as well as plant-level scenario results
  • Bespoke workshops to present the study results and implications for your company
  • Additional consulting to apply the study analysis to your project