Mexico has established comprehensive energy storage regulations - which are a bold step toward a new precedent within Latin America - requiring that all new solar and wind power generation plants build battery systems equal to 30% of their installed capacity - and to a minimum discharge duration of three hours. The announcement of this regulation, which took place in March 2025, marks the first time in Latin America and the Caribbean that any regulatory framework would require an entire storage system for generation. It is already viewed as a model for the region.
A Detailed Look at the New Regulatory Framework
During the "National Strategic Planning Forum" in the Senate, Jorge Islas, Deputy Secretary of Energy Planning and Transition of Mexico, presented the landmark policy, which is now part of the national grid regulations. The requirement is applicable to new wind and solar projects only and stipulates what industry observers describe as a world-record for the amount of renewable energy storage required.
The Latin American Energy Organization (OLADE), which has also recently reported about Mexico's policy in its White Paper on Energy Storage in Latin America and the Caribbean, explains in its findings that the policy presents an important reference point for energy storage development in the region. OLADE also noted that the approach that Mexico is taking provides a model that can be replicated in other countries looking to enhance clean energy development while supporting grid stability.
These regulations are implemented as Mexico pursues an ambitious energy transition strategy. The government is trying to raise the share of clean energy on the national grid from 22% to as much as 45% by 2030. Achieving this transition requires significant new capacity; for 2030 alone the government has announced an expected addition of 21.8GW of generation capacity, with approximately 80% anticipated to be from clean energy sources.
Strategic Vision Behind the Storage Mandate
The storage capacity supports several strategic goals simultaneously. The Mexican grid is dealing with challenges to incorporate variable renewable energy resources (vRE), especially in the north where the curtailment rates for wind and solar generation exceed 8%. The storage capacity is intended to help mitigate these challenges by providing a more reliable renewable energy supply and dampening concerns over intermittent generation.
As Walter Julián Ángel Jiménez, Commissioner of Mexico's Energy Regulatory Commission (CRE), pointed out, "these regulations, [the National Electric System] will have the opportunity to incorporate more renewables into generation." The proposed regulations are an important first step for an overall regulatory regime for energy storage in Mexico.
This policy is part of President Claudia Sheinbaum's larger renewable energy initiative. The administration expects 6.4GW of renewable capacity will be added by the private sector between 2025 and 2030, and that state utility CFE will also expand its own renewable energy portfolio.
Infrastructure Development and Market Response
Under the new regulatory framework, the first projects will be situated in northern states with large solar and wind resources. The government announced that it will develop a series of six "solar-plus-storage" projects in those regions by 2028, with 1,673MW of photovoltaics and 574MW of battery storage. This first wave of projects indicates the beginning of a longer-term expansion, as Mexico's 2024-2038 energy planning has 8,412MW of storage scheduled for deployment.
The new regulatory construct provides private sector participants in three avenues: selling all the green power produced directly to CFE; a joint venture with CFE (with private capital capped at 46% ownership); or developing independent power plants that will participate in wholesale electricity markets or targeted sales.
While the policymaking opens new opportunities for renewable developers and storage providers, there are economic implications as well. Industry analysis suggests the storage requirement could reduce project returns by 2-3 percentage points. However, advocates of the storage argument that regardless, that cost is necessary to ensure reliability of the grid and maximize use of the renewable assets.
Regional Leadership in Energy Transition
With respect to the intervening timeframe, Mexico's policy is notable for its strictness and comprehensive scope relative to its regional peers. In February 2025, India announced a somewhat similar requirement, but its measure is less ambitious, as it allows for only 10% of the capacity to be for 2-hour storage systems. Mexico's higher ambition reflects a sense of urgency both in terms of its energy transition, and the realities of its national grid challenges.
The Latin American Energy Organization has characterized Mexico's regulatory framework as establishing "a leading example for energy storage development in Latin America." This endorsement by the organization indicates that we may see like policies emerge across the region as countries work to reconcile growth in the renewable energy system with grid reliability concerns.
The rollout of this regulation also aligns with Mexico's broader National Electric System Development Plan in which renewable energy and storage are designated priority areas for fortifying the power system. The plan anticipates that clean energy will generate 38% of the total power generation in 2030, which is an increase from the current share.
Future Outlook and Industry Implications
As Mexico implements these regulations, industry analysts are anticipating significant development of the storage industry in the country. Similarly, the first 574MW of battery storage by 2028 may indicate only the first phase of storage development plans in the medium to long-term. The energy planning horizon 2024-2038 projects over 8,400MW of storage deployment in Mexico, which implies that Mexico will become one of the largest energy storage market in Latin America.
The comprehensive nature of the regulatory framework in Mexico - covering both storage requirements and market participation frameworks, is also a template for other countries across the region. While countries across Latin America are looking for methods to progress energy transitions without compromising reliability of their grids, Mexico is taking a sensible approach to balancing regulatory requirements with market frameworks.
Energy stakeholders from around the region will want to see how successful this policy initiative is. If successful in Mexico, it could spur similar activity in other countries across Latin America expediting the integration of renewable energy for generating electricity, while also helping to provide the stability and reliability of the national power system.
