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 drive 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, approximately the electricity demand of the entire state of Querétaro. Can Mexico meet this electricity demand? Some experts are optimistic about the country's ability to meet the challenge, while others are not so sure.
According to the International Energy Agency, global electricity demand from data centers is projected to increase significantly over the next five years. more than doubledThe 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 data centers, including hyperscale ones. AWS, Google y MicrosoftIts arrival is partly due to domestic demand for cloud services and the country's digitization, but, according to Scott, it continues to be driven primarily 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 of this nascent industry, is equivalent to 6% of the total. peak electricity demand from Mexico in 2023. "That's a monstrous amount of energy," Scott said. "We need 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 operating at its limit 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.
In the face of 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), less than 3% in some cases last year.
In Mexico, the responsibility for operating and investing in energy transmission and distribution falls to the State, which has delayed investment for years. Transmission lines grew one 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 that is currently expected to grow. one 0.2% This year, according to the International Monetary Fund. The private sector, particularly data center companies, is already taking steps to close 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 QuerétaroAnd CloudHQ, a global data center provider, is also building one 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 the historical backlogsThe federal government plans to add 2.5 gigawatts to the grid this year, coming from gas plants, to reach the 5.7 gigawatts in 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 stated. The dangers of this dependence became a reality for Mexico in 2021, when Texas cut off the supply natural gas after a frost caused massive blackouts. While two-thirds The experts WIRED spoke to for this article agree that Mexico's electricity generation comes from natural gas that it imports mainly from the United States, and that this is not a cause for concern at the moment.
A far more pressing concern is how the comprehensive reform of the Mexican energy sector This will affect the private sector, including data centers. "What we have today is a host of uncertainties and unanswered questions that are keeping energy investment at zero," Barrios stated. "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 for 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 territory, is concerned about the viability of this industry's growth, but from a different perspective. Querétaro's communities already compete with various industries for resources like water, Deniau stated, adding that data centers... They consume abundantlyThe 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.
