Mexico Energy Sector Reform
Mexico’s 2024–2025 Energy Reform: Implications for Private Sector Participation in the Power Sector
New Laws Restructure Market to Favor State-Owned Enterprises
On March 18, 2025, President Claudia Sheinbaum enacted a sweeping energy reform package that restructures Mexico’s power sector in favor of state-owned companies. The package includes eight new secondary laws and amendments to three existing laws, implementing the framework laid out in Sheinbaum’s October 2024 constitutional reform. These changes largely reverse the liberalization introduced in Mexico’s 2014 energy reform, significantly restricting private-sector participation.
Under the new laws, at least 54 percent of the electricity dispatched to the national grid must come from the Federal Electricity Commission (CFE) plants, leaving up to 46 percent for private sector producers. In addition, the reforms dissolve Mexico’s independent energy regulators—the National Hydrocarbons Commission (CNH) and the Energy Regulatory Commission (CRE)—replacing them with a centralized National Energy Commission (CNE) reporting directly to the executive branch.
These legislative changes align with Sheinbaum’s broader energy agenda, known as Plan México, which aims to add 22 gigawatts of new power generation capacity by 2030, deliver a portfolio of 100 transmission and distribution projects, and ensure the CFE holds at least 54 percent market share in electricity generation. While the government frames these reforms around goals of sustainability and energy security, the shift raises concerns among private and foreign stakeholders about regulatory transparency, investment risk, and market competition.
Despite the increasingly state-dominant landscape, opportunities remain for U.S. companies that align with Mexico’s clean energy and grid modernization priorities. Mexico’s push to expand renewable energy continues to create demand for solar, wind, geothermal, and energy storage technologies, along with smart grid and industrial efficiency solutions.
The new laws define six pathways for private sector participation in electricity generation:
1. Onsite distributed generation up to 0.7 MW, exempt from permit requirements;
2. Self-generation systems between 0.7–20 MW, not connected to the national grid;
3. Self-generation systems between 0.7–20 MW with grid connection, where surplus power must be sold exclusively to the CFE;
4. Open competition for projects larger than 0.7 MW participating in Mexico’s wholesale electricity market;
5. Utility-scale projects developed privately, with electricity sold exclusively to the CFE and possible asset transfer;
6. Joint ventures with the CFE, in which the CFE holds a minimum 54 percent ownership stake.
These models offer limited but targeted avenues for private-sector involvement, particularly for firms offering specialized technology, project development services, or partnership structures aligned with government priorities.
For more information on how these reforms may affect U.S. businesses—and opportunities to promote U.S. energy technologies and services—please contact CS Mexico City at Claudia.Salgado@trade.gov.