Mexico’s energy sector has unveiled a groundbreaking policy, stirring up the global energy storage market and introducing new variables to its development path.
Recently, the Mexican Ministry of Energy announced a new regulation mandating that all newly built wind and solar PV projects must be equipped with energy storage systems accounting for at least 30% of their capacity, with a minimum storage duration of three hours.
Jorge Islas, Deputy Minister of Energy Planning and Transformation, introduced the policy at the Senate’s “National Strategic Plan” forum, noting that it has been officially established through amendments to the grid regulations and is mandatory for all new renewable energy projects. The first batch of 574MW of energy storage batteries will be prioritized for deployment in northern regions rich in wind and solar resources, with plans to be fully operational by 2028. Additionally, Mexico has unveiled its energy storage development plan for 2024-2038, totaling 8,412MW, equivalent to 15% of the current global energy storage market size.
Industry insiders analyze that the introduction of this policy will fundamentally alter Mexico’s renewable energy industry landscape. One renewable energy developer stated, “Although project returns may directly decrease by 2-3 percentage points as a result, failure to comply with this policy may even disqualify projects from grid connection.” Mexican Energy Minister Lopez emphasized, “This is not a multiple-choice question but a required answer. We must adopt this policy to ensure the reliability and stability of our national energy transition.”
Mexico’s aggressive energy storage policy stems from its grid absorption challenges. With the continuous increase in clean energy’s share, Mexico plans to raise it from the current 22% to 45% by 2030, with 80% of new installations coming from renewable sources. However, inadequate grid regulation capabilities have led to a wind and solar curtailment rate exceeding 8% in northern regions, and the 30% energy storage requirement aims to address this issue.
Furthermore, Mexico hopes to establish a new electricity market system through this policy. Complementary innovative market mechanisms allow private enterprises to participate in the electricity market in various ways, including selling all electricity to the state-owned power company CFE, forming joint ventures with CFE (with private sector ownership not exceeding 46%), or directly participating in the wholesale electricity market. This dual-track design of “mandatory energy storage + market openness” aims to ensure grid stability while providing clear expectations for investors.
Additionally, Mexico aims to foster a local energy storage industry chain through this policy. By implementing a combination of measures, including subsidies for local production, tariff exemptions for key equipment imports, and tax incentives for technology transfers, Mexico plans to build a complete energy storage manufacturing ecosystem within three years. This is not only an energy policy but also an industrial policy, marking Mexico’s transition from an energy importer to a technology exporter.
