Mexico’s ambitious plans to enhance its energy independence and transition to cleaner energy sources face a significant hurdle: a critical shortage of freshwater in the regions targeted for expansion. President Claudia Sheinbaum, a former climate scientist, aims to build on the energy reforms initiated by her predecessor, Andrés Manuel López Obrador. Sheinbaum’s administration is prioritizing a reduction in the country’s carbon footprint while pursuing greater energy sovereignty.
In February 2023, the Federal Electricity Commission (CFE) announced plans to construct nine solar power plants with a total capacity of 4.7 gigawatts (GW) by 2030. This initiative would increase Mexico’s solar energy capacity more than tenfold, jumping from the current 433 megawatts (MW). The initial phase of this expansion includes six solar plants equipped with battery storage, with the first expected to be operational by 2027. All six plants will be situated in Northern Mexico, a region crucial to the nation’s economic and energy ambitions.
Northern Mexico is positioned for substantial economic growth. It already hosts a significant portion of the country’s energy sector and has the potential to develop further manufacturing capabilities. According to a recent report by the World Economic Forum, “Proximity to the US border, a business-friendly environment and an entrepreneurial culture make the region prime for foreign direct investment, particularly amid the current wave of nearshoring.” As Mexico strives to secure its energy independence and foster economic development, the border states are central to these goals.
However, this energy expansion comes with a major drawback: the region’s water supply is under serious threat. Over 45% of aquifers in Northern Mexico are overexploited, compounded by low average rainfall. The World Economic Forum highlights that water governance in the area is fragmented, infrastructure is aging, and climate change is intensifying both the frequency and severity of droughts.
The water policy landscape between Mexico and the United States, which has been governed by an 80-year-old water treaty, adds another layer of complexity. This treaty mandates that both countries provide specific quantities of water to each other. However, as populations grow and industrial demands increase, fulfilling these obligations is becoming increasingly difficult. This situation is heightening tensions along the border, particularly as water scarcity threatens to disrupt energy projects.
The interdependence of water and energy, often referred to as the “water-energy nexus,” is crucial in this context. The United States Department of Energy states that “water is used in all phases of energy production and electricity generation.” Conversely, energy is essential for extracting, transporting, and treating water for various human uses. As water stress escalates, it could significantly impede Mexico’s energy initiatives and other burgeoning industries in the region, including data centers, semiconductor manufacturing, shale drilling, and even brewing.
The World Economic Forum emphasizes that “Northern Mexico is a microcosm of the broader resource competition that will define the global energy transition.” This underscores the necessity for a just energy transition that encompasses not only decarbonization but also effective governance of water resources, land use, and social equity. Without a balanced approach, economic development may stagnate, investments could be jeopardized, and public trust may erode.
As Mexico embarks on this energy transformation, it faces a challenging balancing act between advancing its clean energy goals and ensuring sustainable water management. How the country navigates these intertwined issues will have far-reaching implications for its future economic landscape and its role in global climate efforts.
