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Global Onshore Wind Market Report

Key Regional Markets


Onshore Wind Capacity

15.3 GW

GDP (Current Prices) USD (2022)


GDP Growth Forecast (constant prices) (2023-2027)



Mexican Peso

Country Credit Rating (S&P)


Renewable Energy capacity (2022)


Onshore Wind Share in Renewables (2022)


Renewable Energy Target

35% of electricity generation from renewable sources by 2024 and 50% by 2050

Mexico is gradually shifting towards a clean economy that relies on renewable energy sources, as opposed to traditional fossil fuels. Over the past decade, the power matrix has seen a decline of 8% in non-conventional energy usage thanks to the government’s Energy Transition Law. This law has set up a strong growth trajectory for renewable energy deployment, targeting a 50% increase in electricity generation from renewable sources by 2050 (Power Technology, 2022). Wind and solar energy, in particular, will play a significant role in helping Mexico achieve this target since the country has resource-rich locations perfect for wind power generation. 


  • Small-scale renewable projects are seeking corporate interest as distributed generation is gaining significant traction

  • Significant funding initiatives for renewable project deployment and upgradation of transmission network


  • Unsupportive government policies with increased involvement of administration in renewable energy sector

  • Lack of funding initiatives, prolonged permit delays and inadequate transmission networks discourage private sector participants from developing renewable energy projects

Renewable Energy Mix

Source: IRENA Renewable Capacity Statistics July 2023

As of the end of 2022, Mexico has a cumulative installed capacity of 32GW for renewable energy sources. While hydropower is currently the leading renewable energy source, it is gradually being overtaken by onshore wind and solar, which have seen a combined increase of 20% YoY since 2018 (IRENA, 2023). Onshore wind has doubled its share of the energy mix in the last decade. However, in recent years, policy changes regarding the private sector’s role in renewable energy deployment have caused a slowdown in capacity growth and investment inflows.

Installed Capacity: Status and Trend

Trend in Installed Onshore Wind Capacity

Source: Preqin Global Report 2023: Private Equity

Mexico’s cumulative onshore wind capacity saw a sharp rise in 2019, with over 2GW of capacity added by developers who entered the market via auctions in 2017. However, capacity additions fell dramatically below the 500MW mark in 2020 due to pandemic restrictions and new government policies. The López Obrador administration has focused on expanding fossil fuels and transferring control to state-owned entities (CFE), which has hindered the growth of the renewable energy sector. Despite these challenges, onshore wind cumulative capacity had reached 7.3GW by 2022 (IRENA, 2023) (The Guardian, 2021).

Demand Drivers

Mexico’s renewable sector is primarily driven by climate change legislation adopted in 2012 that aims to generate 35% of electricity from renewables by 2024 and 50% by 2050 (Power Technology, 2022). The latest figures suggest that Mexico is well on track to meet the interim targets, as it is only 9% behind the 2024 target. To increase capacity addition, Mexico pledged at COP27 to expand combined solar and wind capacities from the current 16GW to more than 40GW by 2030, with $48 billion of investment earmarked for this purpose (Gobierno De Mexico, 2022). The investment will focus on expanding unexploited wind and solar potential, primarily in the south-eastern region, which is the richest in this regard. Such locations also offer the scope for cross-border export to meet demand in the Central American region.

In recent years, distributed generation (DG) has gained significant momentum in Mexico compared to large-scale wind and solar projects, which stalled due to policy uncertainty. According to the Energy Regulatory Commission (CRE), nationwide distributed generation grew by 30% between 2021 and 2022, with installed capacity by the end of 2022 standing at 2.6GW. DG projects do not require generation permits, and securing approvals requires only a week’s time, making them more attractive than utility-scale renewable projects. 

Although space and capacity are restricted, distributed generation has recently become highly competitive, and municipal incentives surrounding it are expanding swiftly. Therefore, corporates are showing significant interest in small-scale renewable projects to amplify their renewable portfolio while bypassing regulatory convolutions in Mexico. Hence, in 2022, distributed generation assisted Mexico in attracting $3.5 billion in investments (Mexico Business News, 2023). This segment is expected to be a key driver for onshore wind growth.

Market Opportunity

A study published in April 2022 by NREL suggests that Mexico has a strong pipeline of renewable energy projects. The study reveals that the combined pipeline of wind and solar projects amounts to 15.3GW, with 4.8GW in the construction phase, 3.9GW in the permitting stage, and 6.5GW in the early development stage (BNAMERICAS, 2022). Despite the lack of public support for renewable projects, Mexico’s renewable sector has seen remarkable growth due to private sector investments. The untapped regions of Mexico present an opportunity to attract more investments from private sector developers despite the current issues of permit delays, project suspensions, and regulatory uncertainties.

Recently, the Mexican government has shown its intention to address investors’ concerns about market risks by signing renewable energy deals themselves and increasing the Federal renewable portfolio. In June 2022, President Andrés Manuel López Obrador’s office announced that it had signed a deal with 17 US renewable energy companies to build around 1.8GW of wind and solar energy projects in Mexico (PV Tech, 2022). Some of these projects are planned for cross-border energy exports, with an aim to develop transmission interconnections alongside. To further alleviate the uncertainties, in April 2023, the Mexican energy association AME announced its acquisition of Mexico Iberdrola’s 13 power plants with an investment of $6 billion. These efforts were made to attract more investments in the clean energy sector (Iberdrola, 2023).

Mexico presents a significant opportunity for renewable energy developers, as the country’s energy regulator, CFE, aims to maintain a 50% renewable project market share. Mexican authorities plan to add wind farms to industrial parks, with four out of ten parks being solely powered by wind farms. In May 2023, Mexico plans to launch tenders for six industrial parks built along the 300km rail corridor to power the Tehuantepec isthmus rail corridor between Oaxaca and Veracruz states (BNAMERICAS, 2023).

In addition to supporting the energy sector, the authorities are focused on strengthening Mexico’s transmission network. Developing grid infrastructure and transmission lines is of utmost importance, given the increasing demand for grid and transmission lines from various renewable energy projects. To assist in this regard, the Secretariat of Energy (SENER) announced its plans to upgrade the electric system by developing transmission, distribution projects and commercialisation of the electric system on June 1, 2022 (ITA, 2023). Furthermore, state-level initiatives are also underway to ramp up transmission line development. For instance, Mexico’s Querétaro state plans to build 900MW (140km) of new transmission capacity next year, investing $300 million (BNAMERICAS, 2023).

Additionally, Mexico has all the necessary elements to become a significant market for smart grids. The energy regulator for Mexico, CRE, created a smart grid Roadmap in 2020, indicating how the smart grid market could grow to $12.1 billion by 2023. The annual investment in this sector is expected to increase from $205 million in 2014 to $2.1 billion in 2023 (Energy Digital, 2020).


Source: BNEF Global Wind Market Outlook

Mexico’s renewable energy industry has a crucial role in transforming the country’s electricity system, leveraging its geographic advantages. According to NREL estimates, the southeast region alone has a technical potential of 3,669GW of wind (NREL, 2022). However, the projections by BNEF paint a less optimistic picture, with only 5.2GW of capacity expected to be added cumulatively between 2023-2030, with an average annual capacity addition of 651MW. This is due to the slow growth phase caused by regulatory uncertainty.

The current administration’s preference for fossil fuels has resulted in regulatory hurdles that impede renewable energy deployment. Mexico has twice as many gas projects (13.7GW) as prospective wind and utility-scale solar projects combined (6.7GW), according to the Global Gas Plant Tracker (Global Energy Monitor, 2023). Additionally, newly introduced regulations give state-owned utility CFE 54% of the power to control the energy market, while the private sector has access to only 46%, resulting in contract and certificate cancellations and permit delays, which further hinder the expansion of renewables.

In June 2022, CFE cancelled EDF Renewables’ 252MW wind power project on the grounds of violating community norms (Business & Human Rights Resource Centre, 2022). Due to constitutional uncertainty, the Mexican Association of Wind Energy (“AMDEE”) expects to add only 1GW to the existing wind capacity based on the current project pipeline awaiting commercial authorization (Bloomberg Linea, 2022). This has increased project development risks and triggered financial turmoil, hampering investor appetite.

The renewable energy market of Mexico is negatively impacted by policy formulation that favours conventional sources, and investment momentum in the space has been slowed. The planned legislative changes in the power market need to be amended, and many of these proposed legislative changes are currently being contested in court, delaying their enactment. The outlook of Mexico’s renewable energy market will depend largely on the government’s legislative measures to facilitate the energy transition.