Mexico is seeking to attract the data center industry, whose energy demand could reach 3 gigawatts by 2030. The challenge: can the country guarantee enough energy or will it miss out on the opportunity to others?
As AI and increasing digitalization fuel the boom in data centers worldwide, especially in the United States, Mexico is seeking to position itself as an attractive destination for this industry. Industry experts predict that the energy capacity of data centers in Mexico will quintuple by 2030, reaching 1.5 gigawatts, roughly equivalent to the electricity demand of the entire state of Querétaro. Can Mexico meet this demand? Some experts are optimistic about the country's capacity to meet the challenge, while others are less certain.
According to the International Energy Agency, global electricity demand from data centers is projected to more than double in the next five years . The United States is one of the main drivers of this boom, with implications for countries around the world. "That's where Mexico positions itself as a very relevant opportunity for data centers," said Rafael Scott, partner at McKinsey's Mexico City office.
In recent years, Mexico has become home to numerous data centers, including hyperscale facilities from AWS , Google , and Microsoft . Their arrival is partly driven by domestic demand for cloud services and the country's digitalization, but, according to Scott, it remains primarily driven by demand in the United States. In addition to the projected 1.5 gigawatts of growth over the next five years from local demand, McKinsey estimates that Mexico has the opportunity to absorb another 1.5 gigawatts of demand from the United States. To put this into perspective, 3 gigawatts—the potential demand from this nascent industry—is equivalent to 6% of Mexico's total peak electricity demand in 2023. "That's a monstrous amount of energy," Scott said. "We have to get organized as a country, or that electricity will be supplied by others like Costa Rica, Brazil, and Chile."
Except there's a huge problem
Without electricity, there are no data centers. “Today, neither data centers nor any other industry can be certain of finding the electricity they need in Mexico,” stated Rosanety Barrios, an independent energy consultant. Mexico’s national electricity system is stretched to its limits and is currently struggling to meet growing demand, which would be exacerbated by energy-intensive industries. “The national electricity system has been neglected for the past seven years,” Barrios added.
Faced with power outages, the system has operated with alarming reserves (the backup power capacity that can be activated to maintain the stability and reliability of the grid), below 3% in some cases last year.
In Mexico, the responsibility for operating and investing in energy transmission and distribution lies with the State, which has delayed investment for years. Transmission lines grew by 0.1% between 2022 and 2023, and substations by 1% in 2023, while electricity demand grew by 3.5% that same year.
McKinsey estimates that each megawatt of data center capacity requires $10 million, or about $1.5 billion to meet the industry's expected growth of 15,000 gigawatts.
This is a difficult task for a country currently expected to grow by only 0.2% this year, according to the International Monetary Fund. The private sector, particularly data center companies, is already stepping in to bridge this gap. Hyperscale data centers are investing an additional 35% in building electrical infrastructure to connect to the grid, according to Adriana Rivera, executive director of the Mexican Data Center Association, a trade association representing some of the industry's largest players. Microsoft, for example, invested in a distribution substation in Querétaro , and CloudHQ, a global data center provider, is also building a 400-kilovolt transmission line in the state.
Photo: Concepción Núñez|RE
“It’s no secret that we’re investing,” said Rivera, who is optimistic that the data center industry will grow to at least 1.5 gigawatts by 2030, despite the added cost of data center energy in Mexico. Private investments in network infrastructure, let alone public ones, are not only expensive but also slow. “Permits for an electrical project take about two years,” Rivera said, “and once we have the permits, it takes another two years or so to get it up and running.”
From Mexico's data center, time is the key factor for Marco Del Prete, Secretary of Sustainable Development for Querétaro. Some 12 data centers, including the hyperscalers of major tech companies, comprise a capacity of 200 megawatts in the state, Del Prete stated, and he anticipates that figure will double. "All these efforts, let's say the investment, are limited by our delivery timeline, but the will, the capital, and the interest are there." The state's timeline could interfere with the industry's desire to establish itself in Querétaro. Half of the data centers that want to invest in Mexico do so in Querétaro, Rivera stated. "What will happen by 2030? Around 69% of the industry's megawatts will be operating in Querétaro."
The next challenges
Mexico is making progress in increasing electricity generation despite historical shortcomings . The federal government plans to add 2.5 gigawatts to the grid this year, sourced from gas-fired power plants, to reach 5.7 gigawatts by 2027. These projects reflect Mexico's continued reliance on natural gas from the United States. While this dependence poses an inherent risk to the country's energy sovereignty, natural gas is good news for data centers, explains Eleazar Castro, an energy consultant at Elevation Ideas.
Natural gas is economical and provides data centers with a reliable energy source for uninterrupted power supply, he said.
A shortage of this fossil fuel would mean total collapse for Mexico, Castro said. The dangers of this dependence became a reality for Mexico in 2021, when Texas cut off natural gas supplies after a freeze caused massive blackouts. While two-thirds of Mexico's electricity generation comes from natural gas, which it imports primarily from the United States, the experts WIRED spoke with for this article agree that it's not a cause for concern right now.
A far more pressing concern is how Mexico’s comprehensive energy sector reform will affect the private sector, including data centers. “What we have today is a mountain of uncertainty and unanswered questions that are keeping energy investment at zero,” Barrios said. “Nobody is investing today.” In addition to the energy reform, Mexico also enacted a judicial reform that introduced the direct election of all Mexican magistrates and judges at the federal and state levels. This change also adds uncertainty to private investment. “The regulations will have to be extremely generous to private investors to compensate for the perceived risk of the absence of a judiciary,” Barrios added.
Secretary of Energy, Luz Elena González
Energy Secretary Luz Elena González recently stated that Mexico will add 29 gigawatts of electricity generation capacity to the grid over the next three years, a decidedly ambitious goal considering the numerous obstacles and shortcomings currently facing the electrical system. Data centers will have to make a significant effort if they want to expand in Mexico within a few years. Currently, data centers are having to "put out fires" with these types of electricity investments, Rivera stated. Government planning is crucial, he added.
In Querétaro, Yannick Deniau, a member of GeoComunes, an organization that works to defend the land, is concerned about the viability of this industry's growth, but from a different perspective. Querétaro communities already compete with other industries for resources like water, Deniau stated, which data centers consume in abundance . The same could happen with electricity as demand increases. "These situations will make access to basic services more unequal," Deniau said, as Mexico struggles to meet growing demand, with or without data centers.
Original article by Lorena Ríos | August 25, 2025.
