Insight
Mexico’s Capacity Market Settlement 2025: A tale of a rainy season
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Report summary
The 2025 capacity market annual settlement closed at a 1.3749x multiplier—a 31% decline from the 2024 market cap of 2.0x and the first downward move in three years. The reversal was driven by one of Mexico’s wettest years since 1941, which boosted hydroelectric generation from 6.8% to 8.2% of the energy mix and eased pressure on gas-fired peaking units during the 100 critical hours. The final net price settled at 4,397,797 MXN per MW-year (approximately 231,463 USD/MW-yr). All 100 critical hours again fell between April and June, with 95 occurring after 8 pm—reinforcing the structural shift toward spring evening peaks. CFE brought new combined-cycle capacity online, though only one was on time for the critical hours window. This insight examines the key factors behind the 2025 settlement and its implications for Mexico’s power sector.
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