Global Center of Excellence for Green Hydrogen

Mexico is the 16^th largest economy in the world and has enjoyed a stable economic growth since the 1990s. The country maintains deep trade and investment ties with USA(1). Mexico is one of the largest producers of oil in the world (1.9 million barrels daily in 2021), ranking 12^th globally in crude oil production, 21^st in crude oil reserves, 16^th in refined capacity and 5^th in logistics infrastructure. The country has an estimated 17 trillion cubic feet of proven natural gas reserves, and this reflects in the increasing power generation capacity as NG is replacing oil as feedstock in power generation(2).

Currently Mexico has an installed capacity(3) of ~102 GW, with RE (including solar, wind, hydro, biofuel and geothermal) corresponding to 35 percent of the total capacity at ~35 GW.

Mexico is heavily reliant on oil & gas and the ongoing developments in climate change initiatives has led Mexico to revise its NDC which was not at par with the expectations. Mexico now aims to cut greenhouse gas emissions by 30 percent by 2030, up from a previous target of a 22 percent reduction by the same year, set in 2020. The country has also raised its conditional emissions reduction target — depending on outside financial support — to 40 percent from 36 percent previously set(6).

General Information

Demand and Supply of Hydrogen

Mexico lacks a national hydrogen strategy, but the AMH (Mexican Hydrogen Association) created in 2020 aims to promote development of hydrogen industry domestically. AMH involves active participation of public and private stakeholders and comprises of over 50 large companies from different markets associated to the hydrogen value chain(7) .

State owned PEMEX and CFE could become major players in the green hydrogen space in Mexico with over 11 GW of potential electrolysis demand by 2050.

Hydrogen Strategy / Roadmap

Introduction and objectives

Establish mechanisms to facilitate compliance with decarbonization goals
Provide greater regulatory certainty to stakeholders
Reduce infrastructure, production and transportation costs
Establish specific regulation for greenH2
Create incentives for supply and demand
Increase renewable energy penetration
Replacement of grey hydrogen with green for oil refining process. Petrochemical industry presents a potential to reduce 11 MTCO2 eq
Electricity generation: With ~171 MTCO2 eq emissions, emissions from electricity generation can be reduced via hydrogen and natural gas blending in the combined cycle gas turbines in the SEN
Iron and steel: ~23 MTCO2 eq emissions, emissions from iron and steel industry can be reduced via hydrogen and natural gas blending used in the thermal applications
Chemical: ~8 MTCO2 eq emissions, emissions from chemical industry can be reduced via hydrogen and natural gas blending used in the thermal applications
Cement: ~23 MTCO2 eq emissions, emissions from chemical industry can be reduced via hydrogen and natural gas blending used in the thermal applications

Regulatory framework

Not Available

INFRASTRUCTURE

Renewable Energy potential

Mexico is ideally positioned to become a clean energy powerhouse given its world-class renewable energy resource potential and the low cost of renewable energy generation. Mexico’s east side is blessed with hybrid wind and solar energy resource Rapid growth in renewable energy deployment in Mexico could generate high levels of investment, increase energy access, reduce costs to consumers, and—together with other actions—improve the reliability and resilience of Mexico’s power system.

Green hydrogen production has immense potential in Mexico, according to the H2MEX, 51 GW of electrolysis must be installed and 79 GW of pertaining RE by 2050. Green hydrogen costs were estimated to be ~USD 2.4/kg of H2 in 2050 (inclusive of production, transport and conditioning). The country can achieve green hydrogen production cost in 2050 to as low as USD 1-1.4/kg H2(9) owing to its solar energy resource, which is in the high range of 1800-2000 kWh/kWp annual output for over 50 percent of the land mass(10) .

Solar PV potential - ~24,918 GW & Concentrated Solar plant - ~13,000 GW Currently, Solar PV has 9 percent share of total installed power capacity

2.Wind Potential - ~ 3670 GW

Currently, wind power has 7% share of the total installed capacity

3.Geothermal potential - ~ 3.5 GW

Manufacturing

Not Available

Project Outlook

#	Firm	Capacity
1	Tarafert	200,000 GA
2	H2V2 Mexico with H2B2 Electrolysis	Undisclosed
3	PEMEX + NEL	Pilot (Research)
4	Federal Electricity Comission (CFE) (2023)	Undisclosed
5	Delicias Solar S.A	75 MW
6	SENER Ingeniería (small scale - 2023)	2.5 MW