Two possible cures for Mexico’s increasingly unsteady electric grid are to increase national natural gas production and allow for more private participation in the sector, according to recent reports from experts at Rice University’s Baker Institute for Public Policy and the Atlantic Council.
In May, Mexico suffered widespread blackouts in 21 of the country’s 32 states amid a heat wave and drought that left thousands of residents without power. The outages, the first of their kind in years, rattled the energy sector and sparked concern that Mexico’s aspirations for a nearshoring investment boom would be upended by an unreliable electricity supply.
Nearshoring – which refers to companies moving their production and supply chains from China to North America in order to more easily access the U.S. market – is considered to be a generational economic opportunity for Mexico. Its unstable power sector, however, “is likely to impede the country’s ability to take advantage of the historic opportunity,” according to a recent report authored by multiple experts at Rice University’s Baker Institute for Public Policy.
