The state of energy investment schemes in Mexico (September 2026)

Bajío Ventures · September 2026

Mexico’s power sector is no longer on hold. Following the 2024 constitutional reform and the new laws of 2025, the federal government has moved from rhetoric to allocating capacity. The question for investors is no longer whether there is room for private capital, but under which scheme, in which region and at what price.

This piece summarises what we heard at this week’s conference, where the Ministry of Energy (SENER) presented progress on the Expansion Plan, and what it means for anyone looking to invest.

1. The rules: binding planning and partnership with CFE

The new framework rests on two central ideas:

• Binding planning. SENER defines how much capacity is needed, of what type, where and when. Private projects must align with that plan to obtain a permit.
• CFE as preferred partner. Alongside private generation, the law opens mixed development schemes with CFE: mixed investment, long-term production, alliances and other arrangements.

In practice, private capital enters today through four routes:

Route	For whom	Key feature
Private-generator calls	Utility-scale developers	Capacity allocated by region, aligned with the plan
Mixed development with CFE	Developers with capital and execution capability	CFE takes part in the project
Strategic projects (generation + storage)	Renewables and storage ≥ 0.7 MW	Priority processing through the one-stop window (VUPE)
Self-supply and distributed generation	Industry, commerce, end users	Outside the calls; governed by its own regulation

2. The numbers: how much has been assigned

SENER presented the capacity assigned under the Generation Expansion Plan:

Technology	Projects	Assigned	To be assigned
Solar PV	50	7,859 MW	—
Hybrid solar thermal	+2	—	4,595 MW
Wind	17	4,701 MW	2,159 MW
Storage	—	+3,000 MW	—

That is 12.6 GW of generation already assigned and 6.8 GW still to be assigned, plus about 3 GW of storage. The plan is dominated by utility-scale solar, and storage appears as a structural component, not an add-on.

Two points from the conference change how these numbers should be read:

• This is only the first expansion. SENER announced it will keep adding capacity and new clusters in later rounds. Anyone who missed this round is not too late; there is time to prepare a better project.
• The mixed-investment scheme with CFE received roughly 6 times more applications than the capacity on offer. Private capital does want in, and in partnership with the State. But with that level of oversubscription, selection comes down to price and terms, and margins get squeezed. Five out of six projects were left out with land, studies and time already invested. Some can be acquired, redirected to industrial supply or prepared for the next round.

3. The calendar: what is open

Call	Scheme	Milestone
1st	Private generators	Results published (Dec 2025)
1st	Mixed development with CFE	Award published (Jun 2026)
2nd	Private generators	Results expected November 2026
Strategic Projects	Generation + stand-alone storage	Generation results in Dec 2026; storage registration open until late October*

*Check the current deadline on the VUPE.

The storage call is the only window open today. It has a reference of 935 MW nationwide, all with 3-hour duration, distributed by region.

Its target is the transmission grid, not the end user. SENER is after three things:

1. Reliability: fast response to faults and frequency and voltage regulation in a system with ever more solar and wind.
2. Peak cost: charge during cheap solar hours and discharge into the evening peak; the 3-hour duration is designed for exactly that.
3. Strengthening the grid: relieving congestion and, in some cases, deferring transmission works.

What is open to private players is stand-alone, grid-connected storage in partnership with CFE. Storage associated with transmission and distribution infrastructure is excluded, as is storage associated with power plants or load centres holding a current permit. It therefore does not apply to behind-the-meter industrial storage. The Bajío (Western Regional Control Management, GCR Occidental) is allotted just 20 MW. The message is clear: storage needs are in the north, the east and the peninsulas. For the Bajío, the opportunity for large-scale storage in this round is limited.

One requirement should not be underestimated. A permit holder has 8 months to prove its financing structure and 6 months to obtain its social and environmental impact authorisations. These calls reward those who arrive with a mature project, not those who arrive with an idea.

4. The political message: low prices

The undersecretary was explicit: projects must be competitive, with lower capex and lower prices, so that the public feels the benefit.

This has two consequences:

1. Levelised cost of energy (LCOE) wins, not technology. Projects will be judged by what each MWh delivered to the system costs.
2. The benefit must be visible. Because residential tariffs are subsidised, a cheaper MWh does not lower household bills straight away. The benefit comes through a smaller fiscal subsidy, lower generation costs for CFE and more competitive industrial tariffs. Projects that can show local jobs, price and reliability will have a stronger story.

5. Three opportunities worth watching

Geothermal: from niche to open route

The Geothermal Law (March 2025) created a clear framework for private participation, and SENER is promoting it in Guanajuato and Michoacán. There is already a precedent: a 30-year private concession in the “Celaya” zone, Guanajuato, for a binary-cycle plant.

The biggest risk in geothermal is drilling a well that does not produce. That is what the IDB’s Geothermal Financing and Risk Transfer Programme (PFTRG), operated by NAFIN, is for. Its funding combines:

• IDB credit;
• a contingent grant, not repayable if the well turns out unproductive;
• technical cooperation.

For low-enthalpy resources like those in the Bajío, the lowest-capex route is direct use of heat (industry, agribusiness), or standardised ORC modules on existing wells. Germany, with decades of experience with similar resources, is a natural technical partner.

Wind repowering

Much of the wind fleet in the Isthmus of Tehuantepec came online between 2006 and 2012 with 0.85 to 2 MW turbines. With contracts nearing their end, repowering allows more generation on the same site with fewer machines, reusing the substation, roads and land already under contract. The bottlenecks are regulatory: legacy permits, transmission capacity in a congested zone and renegotiation with communities.

Storage and hybrid solutions

With 3 GW of storage in the plan and a dedicated call, storage is no longer optional. For those who do not make the calls, hybridising existing sites (solar plus batteries at an already-assigned interconnection point) is a faster, lower-capex route.

6. The real bottleneck: grid reinforcement works

For many projects, the main obstacle is neither the resource nor the capital but the cost of grid reinforcement works. When a single developer has to pay for reinforcing a substation or a line, a good site becomes unviable.

The current call already offers a partial way out: projects that share a location, interconnection point or voltage level can share reinforcement works, with the cost split in proportion to their MW. But it is a reactive mechanism. It depends on several projects happening to coincide in the same round, and if one withdraws, the cost falls on those who remain.

What is missing is cluster planning: identifying in advance the zones with resource, demand and a reinforceable grid; costing reinforcement by zone; and allocating capacity so that several projects share the cost from the outset. There are clear international references:

• Texas (CREZ): transmission built out to resource zones before the projects arrived.
• United States (FERC Order 2023): interconnection studies by cluster, not project by project.

Storage is part of the solution. Well-sited batteries can replace or reduce reinforcement works, because they inject energy locally during congested hours instead of expanding the line for the peak. A good cluster analysis should assess where it pays to reinforce the grid and where it pays to store.

The opportunity for the Bajío

An interconnection cluster analysis for the Bajío would take four steps:

1. Identify substations with resource, industrial demand and a need for reinforcement.
2. Group compatible projects, both generation and storage, around them.
3. Cost the reinforcement on a shared basis.
4. Present SENER with a portfolio ready for the next rounds.

Sharing the reinforcement lowers the cost per MWh of every project in the cluster. It is exactly what the government is asking for: more capacity at a lower price.

7. What an investor should do today

1. Choose the scheme before the technology. A private call, mixed development with CFE or self-supply each carry different economics, timelines and risks.
2. Arrive with a mature project. Secured land, proximity to a substation with a need, studies under way and financing identified.
3. Compete on cost per MWh. The environment rewards low capex and firm energy.
4. Track remaining capacity by region. SENER updates it monthly; that is where the next opportunities show up.
5. Use risk-mitigation instruments. In geothermal, the IDB programme completely changes the economics of exploration.
6. Cluster instead of competing alone. Coordinating with other developers around the same substation spreads the cost of reinforcement and improves the odds of allocation.

Conclusion

Mexico today has a capacity-allocation system with published rules, calendars and figures. It is not the open market of 2014, but nor is it a closed sector. It is a directed model, in which the State plans and private capital executes, in partnership or through calls.

Oversubscription in the mixed scheme shows that capital is ready. What holds back more projects is the cost of connecting them to the grid. Since this is only the first expansion, regions that reach the next rounds with analysed clusters and shared reinforcements will have the edge.

For the Bajío, the opportunity does not lie in this round’s large-scale storage. It lies in low-cost firm energy for industry: direct-use geothermal, hybrid solutions and a well-structured interconnection cluster, ready for the next call.

Sources: SENER, presentation “Generation Expansion Plan — Assigned capacity” (conference, September 2026) · DOF, Call for Strategic Electricity Generation and Storage Projects aligned with binding planning (15 May 2026) · INEEL / IDB, Geothermal Financing and Risk Transfer Programme in Mexico · Geothermal Law (DOF, 18 March 2025)

Bajío Ventures, operating under the Bajío Invest brand, is a Mexican energy infrastructure investment group based in Guanajuato: capital, a data platform on the regional industrial base and a German industrial channel, with its own advisory presence in Berlin.