Mexico faces a forbidding power supply challenge. It must produce a lot more of it, and not just to satisfy present demand, which too often goes unmet. Taking advantage of the “nearshoring” of global supply chains will require a massive expansion in power generation to serve the companies it hopes to draw inside its borders.

That power must be a lot cleaner than what Mexico provides today. Unlike in other Latin American countries, power generation is Mexico’s largest source of CO2 emissions. Less than 30% of Mexico’s power comes from non-fossil sources, compared with 40% in the US. Without lots of new investment, the country has little hope of achieving its goal of generating 35% of its power from clean sources by next year, let alone meeting its commitment to cut greenhouse gas emissions 35% by 2030.

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