A just energy transition: what Mexico must prepare

Bajío Ventures · August 2026

Mexico has set its course. The Energy Sector Programme 2025–2030 calls for clean sources to generate 38% of the country’s electricity by 2030, up from 23.4% in 2024. The NDC 3.0, presented at COP30 in November 2025, caps 2035 emissions at 404 MtCO₂e (363 with international support) and targets net zero by 2050.

The question is no longer whether the mix changes, but who pays for the change and who keeps the benefit. That is what a “just transition” means, and it is not an ideological question: it is accounting. There are four ledgers Mexico has to prepare before the transition settles them on its own.

1. The region that loses: Coahuila’s coal

The two coal plants in Nava, José López Portillo (Río Escondido) and Carbón II, are the last large customer of the Región Carbonífera. In October 2025 CFE awarded close to 8 million tonnes of coal for MXN 12.2 billion across 27 contracts, nearly all with local producers. Since April 2026 those producers have been receiving formal supply contracts for 2026–2030.

The 2018–2032 plan called for retiring all four Carbón II units in 2029. That plan is no longer in force, and no current document replaces it with a date.

There is, however, an interesting signal. In July 2026 CFE filed with Semarnat for phase III of the Concepción Mendizábal Mendoza PV plant: 339 MWac with battery storage, USD 468 million, inside the Carbón II site, connected to existing infrastructure. That is the right way to start: it reuses the node, the substation and the line — the hardest assets to secure.

What is missing is the other half. A solar plant employs far fewer people than a chain of mines, haulage and a thermal plant. If the coal plant closes without a plan for miners, pit remediation and economic diversification, the transition will be experienced as dispossession — and that carries a political cost for every project that follows.

What to prepare: a credible retirement date anchored in the current power plan; a fund for worker retraining and site remediation; and priority for new capacity — solar, storage, manufacturing — to stay in the same territory.

2. The household that pays: a subsidy that weighs backwards

Mexico’s electricity tariff subsidy is MXN 87.8 billion in 2026 — more than the Mujeres Bienestar pension and the disability pension combined. Even so, according to México Evalúa, the poorest 10% of households spend 3.3% of their income on electricity, and the richest 10% spend 0.8%. Between 2022 and 2024, electricity spending by the poorest households rose 11.7% in real terms; by the richest, 1.5%.

At the base of the pyramid, 295,000 people still have no service. CFE has 42,221 electrification works scheduled and about MXN 19 billion to reach 99.99% coverage by 2028, largely with stand-alone solar modules in remote communities.

A subsidy pays for the same kWh every year, forever — and pays for it with imported gas. A rooftop panel pays for it once. What to prepare: target the subsidy at those who need it, and convert part of it into assets — residential solar, efficiency, refrigeration — for low-income households. It is the only version of the transition in which the poor household’s bill goes down instead of up.

3. The host territory: benefits that are shared

Energy projects are built on ejidos, in Indigenous communities and in municipalities that rarely see the benefit. The Social Impact Statement for the Energy Sector (MISSE), in force since February 2026, already requires the budget for shared social benefits to be at least equal to the cost of addressing the impacts identified.

That is progress, but a proportionality rule is not a model. What to prepare: structures in which the community takes part in the project — leases with rent tied to output, minority stakes, energy at preferential prices, local hiring with training — not just compensation works. The project the community sees as its own is the one that gets built on time.

4. The purse that pays: less oil, more commitments

In the first half of 2025, oil revenue was MXN 442.9 billion — 10.8% of budget revenue and 22.2% lower in real terms than a year earlier. The state is losing the source that historically financed the energy sector, just as it is asked to fund subsidies, electrification, the grid and 54% of generation.

What to prepare: a revenue base that does not depend on the barrel, and rules that let private capital finance what the treasury can no longer cover — with certainty on interconnection, self-supply and storage. Without that, a just transition stays a slogan because no one pays for it.

The reading

1. Just means in the right order. Build the replacement first, then close. Nava shows that a coal plant’s node can be reused for solar and storage; what is missing is the same discipline in the labour and territorial plan.

2. The subsidy is the largest transition fund Mexico is not using. Almost MXN 88 billion a year pays for consumption. Converting a fraction into assets would do more for energy equity than any new programme.

3. For investors in the Bajío, the social side is already a line in the financial model. Shared benefits, local content and training are no longer optional corporate responsibility; they are regulatory cost and, well designed, the fastest route to a social licence. Behind-the-meter industrial projects — on sites that are already industrial, with no new lines and no new territories — are the part of the transition with the least social friction. That is why we focus our work there.

This note is for information only and does not constitute legal or investment advice.

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Sources: Energy21 — PROSENER 2025-2030, 38% target for 2030 · Digital Plural — 23.4% clean electricity in 2024 · Greenberg Traurig — Mexico’s NDC 3.0 · Semarnat — NDC 3.0 · Infobae — CFE coal tender, Oct 2025 · Mexico Business News — Carbón II and the Nava solar plant, Jul 2026 · pv magazine México — Concepción Mendizábal Mendoza III, Jul 2026 · Industry & Energy Magazine — 2026 power subsidy · México Evalúa — Luz a medias: las paradojas de la CFE · El Financiero — “Robin Hood in reverse” · Industry & Energy Magazine — 99.99% coverage by 2028 · CEFP — Budget revenue, January–June 2025 · Ley del Sector Eléctrico

Bajío Ventures — a Mexican energy-infrastructure investment group based in Guanajuato: capital, a data platform on the region’s industrial base, and a German industrial channel, with its own advisory presence in Berlin.