The Mexican market for wind energy is expected to register a CAGR of more than 8% during the forecast period of 2020-2025. Mexico has some of the most attractive territories for wind energy, which lie between the latitudes 14?N and 33?N and the longitudes 86?W and 119?W, signifying that it is one of the few countries that lie within the most favorable sunbelt on the planet that provides better wind current in the offshore region. Moreover, in 2019, the country expected an increase of more than 25% in its installed wind energy capacity, which was likely to be driven by the number of such new wind projects that were anticipated to come online during the year. In addition, the declining costs of wind technologies are becoming competitive with fossil fuel sources, and additional subsidies on wind energy systems are driving the wind energy market further. On the other hand, in the absence of any new initiatives, an underdeveloped power grid of Mexico is expected to hinder the growth of the wind energy market in the coming years.

  • Mexico is focusing on onshore wind power, which may dominate the market due to high investment and better wind current providing economic viability for large project. During 2018, Mexico registered about 23.19% increase in its installed wind power capacity, owing to increasing environmental concerns. Currently, the market is largely driven by commercial interests.
  • The new wind capacity installed in the country increased by almost 100% in 2018, as compared to that in 2017. The Mexican wind industry is focusing on reaching about 13 GW and 50 GW of wind power generation capacity by 2020 and 2030, respectively, by attracting foreign investment. This, in turn, is expected to provide better opportunities to the Mexico wind energy market in future.
  • Increasing wind installations, owing to the projects announced and the ambitious renewable energy targets, are expected to drive the wind market in Mexico during the forecast period.



Key Market Trends

Onshore Wind Power is Expected to Dominate the Mexican Wind Energy Market

  • During 2018, Mexico registered an increase of about 23.19% in its installed wind power capacity. The country installed 929 MW of new wind power capacity, which increased the total installed wind power capacity to 4,935 MW in 2018. About half of the new wind capacity added in 2018 came from the Reynosa I project, with the capacity to produce 424 MW.
  • Moreover, the country has a policy in place under its energy transition law, to generate half of its electricity using clean energy sources by 2034. This is supported by clean energy certificate (CECs) requirements and long-term electricity auctions. The Mexican government was primarily focusing on liberalizing the electricity market. In addition, the opening of the industry to private and foreign investments may drive the onshore wind energy market during the forecast period.
  • Furthermore, the production of wind power in the country was initially driven by environmental concerns. However, these concerns have been superseded by commercial interests. Moreover, the increased reliability convinced large companies to invest in renewable energies, such as wind, for fulfilling the increasing demand for electricity.
  • Hence, with several onshore wind energy projects under operation and others in the planning and construction phase, owing to investment and government policies, the Mexican wind energy market is expected to grow further during the forecast period.



Increasing Investment in Wind Energy Likely to Drive the Market

  • During 2018, Mexico installed 929 MW of new wind power capacity, which increased the total installed wind power capacity to 4,935 MW. Though the country-initiated wind power production, due to increasing environmental concerns, currently, the market is largely driven by commercial interests.
  • Moreover, factors, like escalating demand for renewable energy, favorable government policies, and decreasing cost of equipment, are attracting foreign investors for higher investment in the Mexican wind energy market.
  • Based on the energy reforms, SENER has been planning to invest USD 90 million in the Mexican power sector, from 2016 to 2030. Furthermore, 79% of the investment is allocated for the renewable energy sector, of which, 23% is allocated to the wind power sub-sector. Such increasing investments are expected to impact the development of the market studied, during the forecast period.
  • In addition, Enel’s Mexican renewable subsidiary, Enel Green Power Mexico, signed an agreement with the country’s Federal Electricity Commission (CFE) in 2018, for the 10% expansion of its Salitrillos wind farm. The expansion of these three plants is expected to require an overall investment of around USD 97 million.
  • Hence, the aforementioned factors, such as investment and policies, are likely to drive the market studied, during the forecast period.



Competitive Landscape

The Mexican wind energy market is fragmented. The major companies include Siemens Gamesa Renewable Energy SA, General Electric Company, Vestas Wind Systems, Acciona SA, EDF Renewables Inc., Enel SpA, and others.

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