Articles tagged nearshoring

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.

Mexico’s Claudia Sheinbaum swept to victory in the general election on Sunday, becoming the nation’s first female president in a historic vote that saw her Morena party strengthen its grip on the country’s political establishment.

The nearshoring trend holds big potential for energy demand in Mexico, though numerous factors could hinder the country’s ambitions as a haven for big business relocation, according to new research published by Rice University’s Baker Institute for Public Policy. 

Mexico will need to attract more than $41 billion in investment to generate an estimated 37 GW of additional electricity capacity required to meet the increased energy demand anticipated by nearshoring, Abraham Zamora, President of the Mexican Energy Association (AME), said during a recent presentation in Monterrey. 

Mexican states are working to lure nearshoring investment from international firms, and access to natural gas is pivotal, officials said at an energy conference in Monterrey, Nuevo León.

Mexico’s incoming government should “consider the reactivation of electricity auctions that could drive new energy generation projects that the country needs to get ahead of the demand that will accompany nearshoring in Mexico, such as intense consumption during times of high temperatures and the need to accelerate the energy transition,” Andrea Villanueva Villarreal, a senior advisor and energy consultant, who worked as senior legal counsel at Mexico’s Comisión Federal de Electricidad (CFE) from 2019-2023, told NGI’s Mexico GPI.

Experts from Mexico’s energy industry told NGI’s Mexico GPI that they feel optimistic 2024 will bring positive developments to the natural gas sector following several difficult years of uncertainty and unforeseen policy changes.

Mexico could have a good year in 2024 despite a degree of uncertainty in Latin America, according to analysts at New York City-headquartered political risk consultancy Eurasia Group.

Click here to listen to the latest episode of NGI’s Hub & Flow. NGI editors Christopher Lenton and Andrew Baker discuss their takeaways from the recent U.S.-Mexico Natural Gas Forum in San Antonio, TX.

“The Southeast Gateway project represents a significant long-term investment for the people of southern Mexico by providing them with a new dedicated gas pipeline featuring state-of-the-art technology for natural gas transportation, while addressing the country’s growing energy demand,” Alexis Milo, one of Mexico’s top economists, told NGI’s Mexico GPI.