Mexico Power EPC Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Mexican Power EPC Market is segmented by Power Generation from Sources (Thermal, Hydropower, Nuclear, and Non-hydro Renewables) and Power Transmission and Distribution (T&D).

Mexico Power EPC Industry Overview

Mexico Power EPC Market - Market Summary
Study Period: 2019 - 2028
CAGR: > 3.5 %

Major Players

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*Disclaimer: Major Players sorted in no particular order

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Mexico Power EPC Market Analysis

The Mexican power EPC market is expected to register a CAGR of more than 3.5% during the forecast period, 2022-2027. The COVID-19 pandemic has drastically impacted the Mexican power EPC market by creating supply chain bottlenecks and delays in constructing power projects like the solar photovoltaic (PV) project in Sonora, which led to an increase in the overall costs of the projects. Factors such as the increasing need for clean power and upcoming power generation projects, particularly going parallel with the pace of urbanization, are expected to drive the demand for Mexico's power EPC market during the forecast period. However, the government's intentions to reduce private investments and make the sector more state-owned can pose a significant threat to market growth during the forecast period.

  • The thermal power generation segment is expected to witness significant growth during the forecast period due to the country's current plans to revive the fossil-fuel-based power sector.
  • Emerging markets, including distributed power generation, smart grids, and energy storage in Mexico, are expected to create vital opportunities for the EPC players in the future.
  • The new and upcoming transmission projects are expected to drive the Mexican power EPC market in the coming years.

Mexico Power EPC Industry Segments

The Mexican power EPC market report includes:

Power Generation from Sources
Thermal
Hydropower
Nuclear
Non-hydro Renewables

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Mexico Power EPC Market Trends

This section covers the major market trends shaping the Mexico Power EPC Market according to our research experts:

Thermal Power Generation Segment to Witness Significant Growth

  • The thermal power plants, which consist of oil-based, coal-based, and natural-gas-based power generation in Mexico, accounted for more than 75% of the electricity generated in 2020. It is expected to maintain its dominance during the forecast period.
  • In March 2021, the Mexican government passed an energy bill favoring government-owned generating plants that majorly run on fossil fuels. The priority given to the thermal power plants in the country can be expected to see an increase in the share of thermal-based power generation in the coming years.
  • Further, Mexico was among the several other countries to announce the phase-out of coal-fired plants by 2030. However, the government has retracted these plans and currently does not have any coal power phase-out policy.
  • Though wind and solar power generation have replaced coal technology in the last five years, thermal power generation is likely to dominate the power EPC sector, mainly supported by natural gas-based power generation EPC activities.
  • Several thermal power EPC projects are either in the construction or planning phase. For instance, in December 2021, the construction of Merida Combined Cycle Power Plant-Stage IV started in Yucatan, Mexico. The project includes the fourth power generating station, a gas-fired combined cycle power plant with a capacity of 500MW, and it is expected to be commissioned by 2023.
  • Further, in November 2021, the technology group Wärtsilä announced that it would supply Mexico's state-owned electricity utility, Comisión Federal de Electricidad (CFE), with two sizeable multi-fuel power plants with a combined output of 600 MW. Wärtsilä is expected to deliver the projects on full engineering, procurement, and construction (EPC) basis, and it is also one of the most significant EPC contracts ever awarded to Wärtsilä.
  • Moreover, in July 2020, favoring the coal technology, a Mexican state-owned power utility announced plans to buy 2 million tons of coal for power plants after the government's directive to push for fossil fuel-based power generation. The deal happened with the coal producers of the northern border state of Coahuila.
  • Hence, such a scenario in the country's power sector is expected to offer robust growth to Mexico's thermal-based power EPC market during the forecast period.
Mexico Power EPC Market - Electricity Generation Mix by Source Type

New and Upcoming Transmission Projects Driving the Market Demand

  • The transmission network of the power industry in Mexico has seen a steady development over the last decade to respond to the growing power demand and accessibility issues. In 2020, the country's power transmission reached 1,05,885 km of line length and 1,14,807 MVA of transformer capacity at the voltage levels of 115 kV to 400 kV.
  • Further, to expand the National Transmission network, Mexico has plans to add 1,072 circuit km of line length and 2,875 MVA of capacity under 19 expansion projects and 14 modernization projects by 2035, which is likely to witness significant developments in the coming years.
  • In August 2021, the CFE (Federal Electricity Commission) announced plans to construct Mazatlan II Junction - La Higuera LT2, a 400kV overhead line of 2 km from Mazatlan Potencia, Sinaloa, Mexico, to La Higuera, Jalisco, Mexico. The project is expected to be commissioned by 2024.
  • Furthermore, in 2021, some other vital projects were also planned for 2021-2035. One of them is the modernization of the Tecamachalco–Tlacotepec transmission line project in Tlacotepec and neighboring towns in Puebla. The project comprises a 33 km transmission line with a voltage of 115kV, and it is expected to be completed by 2024, involving major EPC activities.
  • Therefore, owing to the developments in the Transmission and Distribution (T&D) segment of power EPC, it is anticipated that the new transmission plans are expected to boost the power EPC market in Mexico during the forecast period.
Mexico Power EPC Market - Electricity Transmission Line Length

Mexico Power EPC Market Competitor Analysis

The Mexican power EPC market is moderately fragmented. Some of the major players in the market include Siemens Gamesa Renewable Energy SA, Vestas Wind Systems AS, SENER Engineering Group, Técnicas Reunidas SA, and Acciona SA.

Mexico Power EPC Market Top Players

  1. Vestas Wind Systems A/S

  2. SENER Engineering Group

  3. Técnicas Reunidas, S.A.

  4. Siemens Gamesa Renewable Energy SA

  5. Acciona, S.A.

*Disclaimer: Major Players sorted in no particular order

Market Concentration - Mexico Power EPC Market.png

Mexico Power EPC Market Recent Developments

  • In July 2021, Mexico confirmed its plan to develop the Sonora solar project to provide cheap electricity to the Baja California Peninsula. The project will be co-owned by CFE, the state-owned utility, and the state of Sonora will include an outlay of USD 100 million. The project is expected to be commissioned by 2023.
  • In 2021, a new transmission project was added to the country's key planned power projects list, called Veracruz II–Tamarindo II double-circuit line, which includes the upgradation process. It is a planned 36 km transmission line in Xalapa and surrounding towns in Veracruz. The project is expected to get into service by 2025.
  • In March 2022, the Government of Mexico City announced an upcoming call for the second phase of the Central Market solar project, which is estimated to be the biggest solar project installed in a city (36,000 solar modules generating 25GWh per year). The detailed information is expected to be published on the Federal Electricity Commission website soon. Further, the contract signing was expected to take place in May 2022.

Mexico Power EPC Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Scope of the Study

    2. 1.2 Market Definition

    3. 1.3 Study Assumptions

  2. 2. EXECUTIVE SUMMARY

  3. 3. RESEARCH METHODOLOGY

  4. 4. MARKET OVERVIEW

    1. 4.1 Introduction

    2. 4.2 Market Size and Demand Forecast in USD billion, until 2027

    3. 4.3 Recent Trends and Developments

    4. 4.4 Government Policies and Regulations

    5. 4.5 Market Dynamics

      1. 4.5.1 Drivers

      2. 4.5.2 Restraints

    6. 4.6 Supply Chain Analysis

    7. 4.7 PESTLE Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 Power Generation from Sources

      1. 5.1.1 Thermal

      2. 5.1.2 Hydropower

      3. 5.1.3 Nuclear

      4. 5.1.4 Non-hydro Renewables

    2. 5.2 Power Transmission and Distribution (T&D)

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

    2. 6.2 Strategies Adopted by Leading Players

    3. 6.3 Company Profiles

      1. 6.3.1 Siemens Gamesa Renewable Energy SA

      2. 6.3.2 Vestas Wind Systems AS

      3. 6.3.3 SENER Engineering Group

      4. 6.3.4 Acciona SA

      5. 6.3.5 Técnicas Reunidas SA

      6. 6.3.6 Rengen Energy Solutions

      7. 6.3.7 Arendal, S. de RL de CV

      8. 6.3.8 Fortius Electromecánica SA de CV

      9. 6.3.9 Jinko Solar Holdings Co. Ltd

    4. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability
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Mexico Power EPC Market Research FAQs

The Mexico Power EPC Market is studied from 2019 - 2028.

The Mexico Power EPC Market is growing at a CAGR of >3.5% over the next 5 years.

Vestas Wind Systems A/S, SENER Engineering Group, Técnicas Reunidas, S.A., Siemens Gamesa Renewable Energy SA, Acciona, S.A. are the major companies operating in Mexico Power EPC Market.

Mexico Power EPC Industry Reports

In-depth industry statistics and market share insights of the Mexico Power EPC sector for 2020, 2021, and 2022. The Mexico Power EPC research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Mexico Power EPC report PDF.

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