Mexico's Energy Transition in the Age of AI: Data Centers, Demand Growth, and the Road to Decarbonization

Abstract

As Mexico's electricity demand surges on the back of AI data center expansion, the country's energy policy grows increasingly misaligned with its own climate commitments. Despite possessing world-class renewable resources, Mexico continues to expand fossil fuel capacity to meet rising demand, jeopardizing both emissions reduction and the energy security of its own citizens. To identify the primary barriers to renewable deployment in Mexico, this paper analyses the political, technical, and financial dimensions, drawing on academic literature and government documents. The thesis finds that Mexico's failure to deploy renewable energy at scale is not a resource problem but an institutional one, rooted in an ideological commitment to fossil fuel sovereignty that has shaped national policy and in turn constrained the technical and financial conditions the transition requires. The recommendations offer realistic avenues to revise policy accordingly, designed around the ideological and political constraints that Mexican policymakers currently face. This thesis offers both an actionable energy transition roadmap for one of the world's largest emitters, and a replicable methodology for the growing number of developing economies navigating the same convergence of AI-driven demand growth and renewable underdeployment.