Energy demand outlook in Mexico

Energy demand in Mexico is constantly evolving, driven by economic growth, the expansion of industrial activities and population growth. And to supply this, the country needs to solve challenges such as expanding generation capacity and modernizing electricity infrastructure to ensure a reliable and sustainable supply.

In this context, the Ministry of Energy (SENER) published the National Electric System Development Program (Prodesen) 2024-2038, which projects a continuous growth in demand over the next 15 years. According to this research, a base scenario of 2.4%, a high scenario of 2.9% and a low scenario of 2.1% growth is foreseen. Compared to growth in 2022 (3.4%) and 2023 (3.5%), these projections are likely to be exceeded.

In addition, national targets for clean energy generation remain lagging. According to Prodesen, in 2023 only 24.3% of the energy generated came from clean sources, far below the 35% target established in Mexican legislation and in international commitments such as the Paris Agreement.

What is energy demand?

Energy demand refers to the total amount of electrical energy needed by end users in a specific place, during a specific period and for a particular activity such as public lighting, industrial machine ignition, ventilation systems, among others.

Electricity demand is measured in gigawatt hours (GWh) and is generally calculated from the readings of the meters installed at the consumption points of each establishment. Energy distribution and generation companies, such as the CFE in Mexico, use the data provided by these meters to program energy production and ensure that there is sufficient supply to meet demand at all times.

What are the factors that determine energy demand?

There are several social, cultural and environmental factors that impact global energy demand. Among the most important are:

1. Economic growth, which promotes increased industrial production and consumption of goods and services, which translates into higher energy consumption.
2. Population growth , which implies a greater number of homes and businesses, which increases the demand for electricity to meet the needs of public services and the development of new commercial, urban and rural activities.
3. Extreme weather conditions, such as heat waves and cold seasons, can cause peaks in energy demand due to the use of air conditioning and cooling systems.
4. Changes in energy prices can affect consumption patterns and energy efficiency. In turn, the energy policies of each country, such as tax incentives for renewable energy or energy efficiency programs, have a significant influence.
5. Energy efficiency through the use of technologies such as solar panels in distributed generation reduces dependence on large electricity systems and can mitigate the growth of centralized demand.
6. Electromobility , which has grown with the adoption of electric vehicles and their charging infrastructure requirements, adds new demands on the energy system, especially at peak hours.

What affects energy demand?

The same factors that determine energy demand can also significantly alter it and cause short- and long-term fluctuations.

According to the U.S. Energy Information Administration (EIA), between 2021 and 2035, international per capita electricity consumption will grow at an average annual rate of 1.1%, while net generation will increase by 1.8% per year. Furthermore, by 2035, clean electricity is estimated to be 43.1%, growing by 4.0% per year.

However, growing demand can drive the development of renewable energy sources, such as solar and wind, and foster the transition to a more sustainable energy system.

How is energy demand calculated?

To calculate energy demand, the consumption of all end users within a system over a defined period must be summed, using hourly measurements to ensure accurate data. In Mexico, the National Energy Control Center (CENACE) is responsible for monitoring and reporting these values.

To estimate the actual system demand, CENACE employs two main methodologies: by balance and by withdrawals. The first considers the net generation injected, subtracting exports and adding technical and non-technical losses. The second one adds the energy purchases made by Load Serving Entities, excluding losses. Both estimates are essential to settle transactions in the Wholesale Electricity Market, ensuring the system’s operational efficiency.

In summary, understanding energy demand is not only an academic exercise, but a necessity for companies seeking to optimize their operations and reduce costs. By identifying consumption patterns and efficiency opportunities, industries can make informed decisions to optimize their energy management. At Industronic, we offer customized solutions to help you achieve your energy efficiency and sustainability goals – Contact us!