Smart grids or blackouts. The decisive year for Mexico and the United States

The power grid has ceased to be a passive system of wires and substations: in 2024 it became a platform of data and real-time decision-making. The change was not theoretical. In Mexico, the May heatwave triggered rolling blackouts across much of the country and exposed the urgent need to digitalize distribution and manage demand with surgical precision. In the United States, the federal regulator reformed transmission planning to prepare the grid for peak consumption from data centers, electric vehicles, and extreme weather. The lesson on both sides of the border is clear: without smart grids, the economy pays the bill.

The scorecard for 2024 shows mixed but encouraging signals. In the United States, smart meter penetration reached 82% of supply points, consolidating the telemetry base that underpins demand-response programs and dynamic pricing. Two years earlier, the figure was 72% (119.3 million AMI installations), according to EIA and FERC data. This expansion allowed for broader programs that shift load during critical hours and lower the system’s marginal cost.

Regulation accompanied investment. In May 2024, FERC issued Order 1920, which mandates 20-year planning horizons, standardized benefit assessments, and cost-sharing for major grid reinforcements. The goal is a more robust mesh capable of integrating renewables and new demand at cost-effective levels. Meanwhile, the Department of Energy rolled out the $10.5 billion GRIP program for resilience and flexibility, with a second round committing about $4.2 billion at the end of 2024 to automation of circuits, smart reclosers, and sensors on distribution feeders.

In Mexico, 2024 also brought concrete advances in distribution. CFE modernized 1.39 million meters and conducted 3.9 million equipment reviews, recovering energy and sales previously lost to failures or irregular connections. The national indicator of total losses stood at around 12% of SEN consumption, showing slight improvement compared to 2022. At the same time, the official planning program (PRODESEN) envisions up to 135 distribution projects and 194 transmission projects through 2030, with an emphasis on industrial corridors in the north and center, where nearshoring accelerates demand. The priority for 2025 is to transform that pipeline into advanced measurement, field automation, and controllers that reduce outages and non-technical losses.

Academia reinforces the technological pathway. NREL emphasized in 2024 that modernizing medium- and low-voltage networks is a precondition for electrifying end uses and absorbing distributed generation. Its research shows how demand flexibility and distributed energy resources (DERs) can provide voltage support and rapid response—services typical of a “smart” distribution network. In Mexico, UNAM operates a living laboratory for smart grids at Ciudad Universitaria that explores advanced controls, microgrids, and digital twins, offering key inputs for CFE and local governments to launch pilots with public value and scalability.

The binational angle matters because the shocks of 2024 respect no borders: extreme heat, transmission bottlenecks, and demand spikes from the digital economy. Mexico–U.S. coordination can accelerate interoperability standards (AMI 2.0), substation cybersecurity, anonymized data exchanges for demand forecasting, and common rules enabling consumers to act as “prosumers” with batteries, rooftop solar, and bidirectional chargers. In the United States, Order 1920 creates a framework to rigorously calculate project benefits; in Mexico, PRODESEN and CFE’s modernization programs provide the platform for states and municipalities to demand advanced measurement, reclosers, and demand-response schemes in industrial parks and residential neighborhoods. The battleground is distribution: it is there where the next decade will be won or lost.

My outlook for 2025: the risk is not technological but political-institutional. In Mexico, it is urgent to shield multiyear budgets for distribution, accelerate acquisitions with cybersecurity requirements, and demand quarterly metrics on losses, SAIDI/SAIFI, and AMI adoption by zone. In the United States, litigation against Order 1920 and local resistance to new infrastructure may delay benefits unless costs are socialized and flexibility is compensated where it is cheaper than copper. In both countries, the private sector must commit to open interoperability and active participation in demand-side programs: every percentage point of flexible load activated during peak hours is worth more than a megawatt of average capacity. And local governments face an immediate task: turning the blackouts of 2024 into the policies of 2025 that multiply smart meters, feeder automation, and neighborhood-level flexibility markets. It is a binary choice: either we build smart grids, or we continue managing blackouts.

Written by: Editorial

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