ENERGY SAFETY NETS MEXICO CASE STUDY

This case study examines Energy Safety Nets (ESNs)—social assistance mechanisms designed to help poor and vulnerable households access modern energy services—in Mexico. It analyzes four specific measures: differentiated electricity tariffs, the Oportunidades Energéticas program, the Fondo de Servicio Universal Eléctrico (FSUE), and a pilot program for subsidized LPG. The report finds that while Mexico has extensive experience with social safety nets, its energy subsidies often disproportionately benefit wealthier households, and targeted ESNs have frequently been short-lived due to political transitions.

• Mexico utilizes a complex residential electricity tariff structure consisting of increasing block tariffs (IBT), volume-differentiated tariffs (VDT), and regionally-differentiated tariffs to provide below-cost electricity to most consumers. On average, this subsidy covers 54 percent of residential electricity costs and represents approximately 0.5 percent of total GDP.
• The Oportunidades Energéticas program (2007–2011) provided cash transfers to eligible households to offset energy costs and promote the use of cleaner fuels. However, it excluded the most marginalized populations because it required beneficiaries to present an electricity bill and live in communities with existing health and education facilities.
• The Fondo de Servicio Universal Eléctrico (FSUE), established in 2016 to provide electricity to remote communities, connected 42,000 households by mid-2018. The program has faced challenges, including a lack of data on impact and a requirement that communities be within five kilometers of the existing grid for extension projects, which may exclude the most marginalized.
• A pilot program from July 2017 to December 2018 sold reduced-price LPG through the Diconsa state-owned store network to reduce the use of firewood and coal. The program donated over 13,000 sets of LPG stoves and cylinders across 12 states, but it was terminated after 18 months for unknown reasons.
• Energy consumption patterns in Mexico vary significantly by region: the northern region sees peak electricity demand at midday in summer due to air conditioning, while the southern region peaks during winter nights for heating. Southern states are also more likely to rely on firewood for cooking compared to northern states where natural gas infrastructure is more common.
• Income inequality in Mexico is high, with a Gini coefficient of 0.458, the highest among OECD countries. This disparity is reflected in energy spending, where the lowest four income deciles spend 5.4 percent or more of their income on energy, while the richest decile spends less than 3.2 percent.
• The report recommends that electricity tariff subsidies be better targeted toward poor households by revising the high-consumption threshold or using social assistance registers. It also suggests expanding the FSUE to include clean cooking technologies and involving subnational governments in the design and evaluation of ESNs.

APA

Sanchez, P., Chavez, D., Bello, C., Morales, A., Bello, A., & Moreno, A. (n.d.). ENERGY SAFETY NETS MEXICO CASE STUDY. Sustainable Energy for All. https://www.seforall.org/system/files/2020-06/ESN_Mexico_SEforALL.pdf

Chicago

Sanchez, Paul, Danilo Chavez, Claudia Bello, Adrian Morales, Abigail Bello, and Aban Moreno. ENERGY SAFETY NETS MEXICO CASE STUDY. Sustainable Energy for All, n.d. https://www.seforall.org/system/files/2020-06/ESN_Mexico_SEforALL.pdf.

Wikipedia

{{cite report |last1=Sanchez |first1=Paul |last2=Chavez |first2=Danilo |last3=Bello |first3=Claudia |last4=Morales |first4=Adrian |last5=Bello |first5=Abigail |last6=Moreno |first6=Aban |title=ENERGY SAFETY NETS MEXICO CASE STUDY |publisher=Sustainable Energy for All |url=https://www.seforall.org/system/files/2020-06/ESN_Mexico_SEforALL.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sanchezndenergy, author = {Sanchez, Paul and Chavez, Danilo and Bello, Claudia and Morales, Adrian and Bello, Abigail and Moreno, Aban}, title = {{ENERGY SAFETY NETS MEXICO CASE STUDY}}, institution = {Sustainable Energy for All}, url = {https://www.seforall.org/system/files/2020-06/ESN_Mexico_SEforALL.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }