Mexico’s electricity demand hits record amid extreme heat and water shortages

By Thomson Reuters May 28, 2024 | 1:18 PM

MEXICO CITY (Reuters) – Mexico has been consuming record amounts of electricity and occasionally more than its utility infrastructure can generate and transmit, official data showed, as scorching heat raises the likelihood of power outages.

In the late afternoon on Monday, Mexico consumed 51,595 megawatts of electricity across the country, grid operator CENACE recorded.

When demand exceeds supply, the country becomes much more prone to outages.

With some widespread outages so far this year and hotter days ahead, addressing this problem will be one of the main challenges for the next president, who will be elected on Sunday.

State-owned utility CFE, a near-monopoly that produces 99.47% of Mexico’s electricity, and state-owned grid operator CENACE are suffering from aging and insufficient infrastructure as well as inadequate efforts to modernize and invest in renewable power sources.

“There have been too many years now where demand was growing but there was an underinvestment in electricity generation and transmission,” said Paul Alejandro Sanchez, an independent energy consultant. “The challenge isn’t the average demand. It’s when demand spikes to such extremes.”

Heat has driven electricity consumption by both households and industries, but Mexico also keeps growing.

Increasing supply is difficult, and hydroelectric plants in particular have been hit by extreme water shortages.

Over the past six years, energy nationalist President Andres Manuel Lopez Obrador has prioritized CFE, which largely burns fuel oil to generate electricity. He also curtailed growth of privately owned generators, many of whom have seen their renewable energy plans stymied.

Lopez Obrador is barred from running for a second term in Sunday’s election. But the three candidates have all vowed to tap the country’s vast solar, wind and water potential to generate more electricity.

Claudia Sheinbaum of Lopez Obrador’s ruling Morena party, who is leading the polls, and her closest opponent, Xochitl Galvez, have said that they would focus on renewable energy to boost sustainability.

The National Autonomous University of Mexico forecasts new heat records in some states will lead to “an increase in energy demand, poor air quality and forest fires.”

(Reporting by Stefanie Eschenbacher; Additional reporting by Adriana Barrera and Brendan O’Boyle; Editing by Cynthia Osterman)