Mexico gas, power and renewable service: 2022 year-in-review Report

Insight 16 January 2023

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Report summary

Gas price volatility marked 2022, becoming a common theme as the Russian invasion of Ukraine shocked markets. Henry Hub and major US price indexes with influence on Mexico’s prices increased to levels not seen since the mid-2000s. These effects cascaded down to Mexico’s IPGN which, up to November, averaged US$6/mmbtu, an increase of 50% year-on-year. However, as the US gas market rebalances and the supply and demand mechanism reappears, Henry Hub prices should start their recovery path. Mexico’s prices will shortly follow, returning to 2019 levels, marking a promising start for 2023. In an energy system that relies heavily on gas, how did the Mexican power and gas markets perform in 2022?

Executive summary
Price volatility created by weather, international conflict, and supply chain upheaval temporarily causes spikes in Mexico’s natural gas prices
The next wave of gas infrastructure: Midstream and LNG in the spotlight
Growing demand and dominance of gas-powered plants pushed power prices upward
Solar and wind generation decreased while coal surged
Mexico set ambitious renewable generation goals, but doubts about its compliance capacity remain