Three Mexican power sector scenarios for the period 1996-2025 are subjected to a cost-benefit analysis. The three scenarios are: base (using fuel oil), official (introducing natural gas) and transition (incorporating renewable energy). Also technical, economic and energy resources databases are constructed to supply information for the analysis. Benefit/cost ratios (B/C) are obtained by varying the following economic parameters: fossil fuel average prices, discount rates and capital costs evolution as an expression of technological change. For present technical and economic conditions, the B/C ratio of the official scenario is more economically favorable than that of the transition and the transition is more favorable than the base scenario. Also, the viability of the transition scenario increases rapidly when technological change is taken into consideration. (C) 2003 Elsevier Science Ltd. All rights reserved.