Policy Memo: Development of the Offshore Wind Regulatory Framework in Mexico

Block Island Wind Farm

To: Jorge Islas, Undersecretary for Planning and Energy Transition

From: Hector Luna, Senior Energy Analyst

 

In Brief

 

Mexico should establish a regulatory framework for offshore wind to expand renewable generation, meet climate commitments, and attract investment. While offshore wind costs remain higher than onshore, technology improvements are driving prices down. Offshore wind also requires less land and generally faces fewer local opposition challenges, making it a strategic complement to onshore wind and solar development. A robust framework could unlock Mexico’s large offshore wind potential, diversify electricity supply, and strengthen energy security.

 

Problem Statement

 

Rising electricity demand

Electricity consumption per capita in Mexico has grown 52% from 2000 to 2024.[1]  Population growth, industrial expansion, and climate-driven cooling needs are expected to continue driving demand. PRODESEN projects an annual demand growth of 2.1–2.9% over the next 15 years, highlighting the urgency of expanding generation capacity.[2]

 

Dependence on natural gas imports

Natural gas fuels approximately 62% of Mexico’s electricity, and over 70% of national demand is imported from the United States.[3] This dependency exposes Mexico to energy security risks from geopolitical tensions, supply disruptions, or market volatility.

 

Challenges for investment

Companies seeking to establish operations in Mexico require reliable and affordable energy. Constraints on clean and stable electricity may limit foreign investment and slow industrial expansion, especially as multinational companies prioritize decarbonization in their operations.

 

Decarbonization targets

Mexico has pledged 45% clean electricity by 2030[4] and net-zero emissions by 2050.[5] However, renewable sources accounted for only 24% of generation in 2024 (solar PV contributed 7% and onshore wind 6%).[6] Some onshore wind projects have faced land-use conflicts and community opposition. To date, Mexico has no existing offshore wind industry.

 

Analysis

 

Mexico has significant offshore wind resources. The World Bank estimates 869 GW of total technical potential (fixed and floating turbines), with 402 GW suitable for fixed-bottom technology.[7] Offshore wind could generate a substantial share of Mexico’s future electricity, complementing onshore wind and solar.

 

Meeting the rising electricity demand

Offshore wind resources along the Gulf of Mexico and Pacific/Baja coasts strengthen in the late afternoon and evening, which could complement solar output. Projects near major coastal load centers (Veracruz, Yucatán, Baja California) could reduce transmission congestion and avoid the long-distance bottlenecks associated with onshore wind or remote solar. Even partial exploitation of offshore potential could help meet PRODESEN’s projected demand growth while reducing reliance on gas-fired peak load plants.

 

Enhancing energy security

Adding offshore wind could strengthen energy independence by reducing exposure to imported natural gas. With nearly 75% of natural gas sourced from the United States in 2024, a diversified energy matrix with domestic offshore wind could lower vulnerability to price spikes, pipeline disruptions, and policy shifts. EMBER projects that achieving 45% clean generation by 2030 could reduce gas demand for power by 20%.[8]

 

Attracting investment and fostering economic activity

A clear regulatory framework and targeted incentives could attract foreign direct investment, supporting electricity generation and emerging industries like green hydrogen and ammonia. Expanded investment would enhance competition, reduce costs for end-users, and boost tax revenues. Local supply chains and operations in coastal regions would also generate jobs and stimulate regional economies.

 

Supporting decarbonization goals

Offshore wind offers a low-carbon, scalable solution to meet Mexico’s net-zero targets. Even developing a fraction of the fixed-bottom potential (~402 GW) could provide a generation capacity four times Mexico’s current total. High capacity factors (40–50%) make offshore wind a reliable complement to solar and onshore wind.

 

Promoting just energy transitions

Developing offshore wind projects could generate employment and industrial activity in economically marginalized coastal states like Oaxaca, Campeche, Tabasco, and Yucatán. Policies supporting local involvement can align energy transition objectives with social and economic development, ensuring benefits are widely shared.

 

Cost-benefit and political feasibility

Offshore wind is technically and economically viable. While currently more expensive than onshore wind, costs are declining due to technology improvements.

Offshore wind can deliver 9,321 GWh by 2050, with an estimated $223 million USD in avoided health, environmental, and economic damages.[9] Additional economic benefits include revenue streams from taxes and royalties, fuel cost savings from reduced natural gas use, and industrial development in coastal regions.

Mexico is uniquely positioned to advance offshore wind development. For the first time, the country is led by a president with a climate science background, while the ruling party holds a majority in both chambers of Congress and governs two-thirds of the states. In addition, opposition parties support a credible and achievable decarbonization pathway. Together, these factors create a favorable political and institutional environment in which offshore wind could become a strategic pillar of Mexico’s clean energy transition and bolster the country’s international climate leadership.

 

Recommendations

 

To accelerate the development of Mexico’s offshore wind industry, the Undersecretariat of Energy Planning and Transition should:

  1. Create a multi-stakeholder working group comprising private sector leaders, academia, and civil society to share insights, best practices, and lessons learned, ensuring inclusive and informed policy design.
  2. Commission a national offshore wind roadmap that establishes clear targets, milestones, and strategic activities to guide phased industry development and investment planning.
  3. Leverage international support and grants from NGOs and development agencies to fund regulatory analyses, technical feasibility studies, and pilot projects, particularly in high-potential regions such as the Isthmus of Tehuantepec.
  4. Coordinate with the Ministry of the Environment and state authorities to strengthen regulatory frameworks, streamline permitting, and integrate environmental and social safeguards.
  5. Engage proactively with the Mexican Congress to build consensus, raise awareness, and facilitate the timely passage of enabling legislation for offshore wind development.

 

  1. Sources

    [1] International Energy Agency. (2025). Mexico: Electricity. IEA. https://www.iea.org/countries/mexico/electricity

    [2] Centro Nacional de Control de Energía. (2024). PRODESEN 2024-2038: Capítulos 1 al 6. https://www.cenace.gob.mx/Docs/16_MARCOREGULATORIO/Prodecen/20%202024-2038%20Cap%C3%ADtulos%201%20al%206.pdf

    [4] Reuters. (2025, January 13). Mexico’s Sheinbaum lays out roadmap to make country an economic powerhouse. Reuters. https://www.reuters.com/world/americas/mexicos-sheinbaum-lays-out-roadmap-make-country-an-economic-powerhouse-2025-01-13/

    [5] Semarnat. (2024, November 27). México reafirmó su compromiso con la acción climática ambiciosa en la COP29. Secretaría de Medio Ambiente y Recursos Naturales. Retrieved from https://www.gob.mx/semarnat/prensa/mexico-reafirmo-su-compromiso-con-la-accion-climatica-ambiciosa-en-la-cop29?idiom=es

    [6] International Energy Agency. (2025). Mexico: Electricity. IEA. https://www.iea.org/countries/mexico/electricity

    [7] World Bank. (2020). Technical potential for offshore wind in Mexico: Map [PDF]. Energy Sector Management Assistance Program (ESMAP). https://documents1.worldbank.org/curated/en/540571586840981675/pdf/Technical-Potential-for-Offshore-Wind-in-Mexico-Map.pdf

    [9] Own Hypothetical Cost-benefit Analysis.