Official data from the National Development Program of the National Electricity System reveal a disparity: while electricity demand has increased around 10% in 2023, electricity generation has only grown 1%. This gap between supply and demand is expected to persist in the coming years, exacerbated by phenomena such as nearshoring, which is leading to the relocation of supply chains and the arrival of new industries in the country.
“Last year we had the indicator that the generation capacity we have was not enough to meet this demand and it was already forecast that these years and the following years would be quite hot and therefore demand was going to grow. And it grows due to two conditions, yes due to the climate, but also due to nearshoring,” says Casiopea Ramírez, a sector analyst and founder of the consulting firm Fresh Energy. “The greater the economic growth, the greater the demand for electricity and therefore we need to have more plants to generate that energy.”
Insufficient electrical infrastructure
The government’s energy policy, focused on consolidating state control over electricity generation, has largely contributed to the current crisis. The Federal Electricity Commission (CFE) has hindered the entry of private companies into the sector and has delayed the entry into operation of new plants, while transmission and distribution infrastructure projects have been left in limbo.
The state company announced the construction of some power plants in the south of the country and the creation of the Puerto Peñasco solar park, but none of the latter has come into operation and analysts do not expect that to happen soon.
The CFE has also not executed transmission and distribution infrastructure projects, a segment of the business that only the company can participate in.
On the other hand, the decision to increase dependence on hydroelectric plants, in an attempt to increase the generation of clean energy, has been counterproductive in a context of persistent droughts that have reduced water levels in dams. This lack of foresight and adaptation to climate changes has left the electrical system lacking the necessary resources to cover demand peaks.
What is happening, analysts say, might be summarized as follows: electricity demand is growing – especially due to climatic factors – and there is no short-term plan to ensure that the supply of the electricity generation, distribution and transmission system energy equals it.
So far this six-year term, the state-run CFE has executed less than 10% of the infrastructure projects necessary to satisfactorily maintain the system. In 2022, Cenace had already admitted that the country might suffer blackouts due to the “lag” in the expansion of the transmission network.
Cenace information says that at least 98% of alert states – which indicate that something is not working well in the system – are related to failures or lack of infrastructure in the national transmission network or the general distribution network.
In recent years the population has increased, more industries have arrived and the needs related to electricity have grown. As an example, between 2022 and 2023, sales of 100% electric cars doubled in the country, going from almost 6,000 to 13,000 units. But the grid and the electrical system, on the contrary, have not evolved at the same pace.
Unless urgent action is taken to address these structural deficiencies, blackouts might become an increasingly frequent reality for the country.
How do you explain what happened on Tuesday?
In a brief explanation, Cenace said that at least a dozen plants were disconnected from the system and the reserve level was around 3%.
Analysts explain that what happened is that a failure in a transmission line – which might have been caused by excess demand – violated the operating parameters that power plants need to maintain. Then these, as an automatic insurance, were disconnected from the system because it cannot operate with the parameters out of range.
And then the system operator, Cenace, begins to disconnect load centers – that is, remove electricity from areas – to reduce demand and try to keep the system in balance.
“This, let’s say, is relatively normal, but the systems must therefore have a reserve margin. What if one [central] If it fails, you have a spare. But in this case there is not because some private plants are stopped, because they do not give permits, because they are also reducing the generation capacity of some private plants,” says Ramírez. “This has a high probability of continuing like this because you cannot put, you cannot take plants like that out of nowhere and connect them. And you can’t put in transmission lines like that just overnight.”
