IMPACT REPORT 2019
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2019
Mexico has a new political order that in only a few months has made its impact felt across the energy industry.
President Andrés Manuel López Obrador’s administration was loud and clear from the beginning about its mandate to boost Mexico’s electricity generation and cope with the country’s increasing energy demand. His ambitious National Electricity Program, executed by Manuel Bartlett, new Director General of CFE, set a course to revamp the country’s coal-fueled power plants, geothermal plants and hydroelectric installed capacity.
One key aspect of López Obrador’s strategy that remains unclear is whether or not the new energy model, led by Rocío Nahle, Minister of Energy, will continue using the tools employed by the previous administration to achieve not only the goal of supplying the country’s energy needs but also aligning the country’s energy production to its international commitment of increasing the participation of renewables to 35 percent of the total mix by 2024.
Adding to industry concerns, Alfonso Morcos, the new Director General of CENACE, announced the cancellation of the fourth edition of the long-term electricity auction and CRE saw a 28 percent reduction in its budget for 2019.
Whether López Obrador strengthens CFE or keeps the door open for future editions of the long-term electricity auctions, 2018 showed that Mexico is already experiencing an open market where new and better technologies are being deployed throughout the country. Mexico Energy Forum 2019 brought together the insights of industry experts and key stakeholders who are shaping the country’s energy landscape from different angles at this key moment in time. The forum motivated a deep, informed and rich discussion on the sector’s most pressing issues with a look at the potential evolution of the energy model in the coming years and the opportunities that await.
Quick Look:
“The Ministries and President are taking time to evaluate and fully understand the best alternatives and solutions for the Mexican industry”
INCLUDING:
∙ Abel Hibert, Economic Advisor to President López Obrador
∙ Claudio Rodríguez, Thompson & Knight
∙ Gerardo Pérez, EDF Renewables Mexico
∙ Alan Sakar, Clifford Chance
∙ Héctor Olea, Gauss Energia
∙ Héctor Rocha, EY
∙ Leopoldo Rodríguez, AMDEE
∙ Héctor Olea, Gauss Energía
∙ Francisco Salazar, Enix
TOP SPEAKERS
∙ Ramón Basanta, ATCO Energía
Abel Hibert, Economic Advisor to AMLO
Alejandro Pardiñas, Vice President of ABS
COMPANY ATTENDANCE
Aaron Black
AB Energy México
Abcontrol
ABS WIND ENERGY
ABS WIND MEXICO
Access to Energy
ADFERI
ADM Mexico
AEROSPEC
Agencia de Energía del Estado de Campeche
Alion
AlsoEnergy Alten
AMDEE
AMFEF
Anaf Energy
ANES
ANTUKO
Arctech
Array Technologies
Arteche Turnkey Solutions
Asolmex
ASTRONERGY
ATA
ATCO Energía
Atlas Renewable Energy
AVITAR ENERGÍA SUSTENTABLE
AWS Truepower
Baker & McKenzie
Banorte
Barlovento
BayWa-re renewable energy
Becquerel Capital
Beel Infrastructure Partners
BELDEN
BID Energy
BID GROUP
Biopappel
Bloomberg
Boston Strategies International
Burns & McDonnell
Cacheaux, Cavazos & Newton
CAMEXA
Capwatt
CEMEX
CFE
Citibanamex
Clifford Chance
Climatik
COMEX
Conecta Cultura
Constructora y Perforadora Latina
CRE
Cryoinfra
Cuadrante
Customized Energy Solutions
Deloitte
DHL
Diamond Generating Coorporation
Diterra
E2M (Energy to Market)
E2Q de Mexico (Barlovento)
EDECSA
EDF RENEWABLES
El Economista
El Financiero
El noticiero
El Universal
Embajada de Rusia
EMERSON
Enel Green Power
Energía Hoy
Enerray
Enertis
Enilso
Enix
ENVISION
ERM
EVA
Excélsior
Expansión
EY
FINESTRA ENERGIA
First Solar
Fondo Casa Sola
Forbes Ftech
G3R
GALLO ABOGADOS
García Mingo & Tejedo Abogados, S.C.
Gauss Energia
GCL
GCLS
GCSC
Generac Ottomotores
Genesal Energy
Geoter
Gobierno de Alberta
Gonzalez Cavillo (antes ENUMA)
Goodrich Riquelme Asociados
Green Momentum
Greenberg Traurig
Greentech Solar
GROUPE VALECO
GRS
Grupo Bimbo
Grupo Expansión
Grupo Imagen
Grupo Industrial Aguila
Grupo Mexico
Grupo Milenio
Hermosillo
Holcim Mexico
HR Multitrade
IFC
Informa México | UBM
Ingeniería de Sitemas Eléctricos y de Bambeo SA de CV
Iniciatika
Intergraph de México
Invenergy
Japan Bank for International Cooperation
Jema Energy
Jinko Solar
Kiewit
Korn Ferry
La Jornada
Longi
Longi Solar
M3security
Marathon Capital
Marcos y Asociados
MARSAM SOLAR
MAYER BROWN
METKA EGN
Metropolitano
Mexión
Mitsui Power Americas
Profile of Attendees
Murguia
Natura Medio Ambiente
NexTracker
Norton Rose Fulbright
Notus Energy
Oaklins Capital Alliance Corporation
OCA GLOBAL
ORGWARE MX
OSOLEC
Pfiffner
Pillar Mexicana SA de CV
POCHTECA
Powerstein
Prana Power
Presidential energy advisor
Procobre
Pulsar Noticias
PWC
RAMADASA
RED ENERGÍA
Red Intelligence
REDD
Reforma
Rengen
RENGEN energy solutions
Repsol
Revista Iniciatika
RISEN ENERGIA
Rosatom
S&J Law Firm
Sacromonte Ganuc de México
SAP Global
Schneider Electric
Secretaría de Relaciones Exteriores
SENER
SER CONSULTORES
Siemens Gamesa
Sinia Renovables (Banc Sabadell)
SOSTENIBILIDAD
South Pole
SRE
SUMMUM PROJECTS MEXICO
Sustainable Energy For All TELEFONICA
Tenaska
Tepoli
Thermiun
Thompson & Knight
TIBA
Tigo Energy
Top Energy
Toshiba
Tradeon Energy
Trina Solar
TSK ELECTRONICA Y ELECTRICIDAD,
S.A.
TUV Rheinland
UBM
VANSERTEC
VEOLIA
Vera y Asociados
Vive Energía
Voltalia Mexico
Von Wobeser y Sierra
Vudoyra
Wärtsilä
WILLIAMS SCOTSMAN MEXICO
WOOD
Yo emprendedor
Zumma
PROGRAM
07:30 REGISTRATION
08:30 MEXICO’S NEW ENERGY MODEL
Presentation: Abel Hibert, Economic Advisor to President López Obrador
09:15 DIVERSIFYING MEXICO’S ENERGY MIX
Moderator: Claudio Rodríguez, Head of Mexico City Office at Thompson & Knight
Panelists: Gerardo Pérez, Director General of EDF Renewables Mexico
Leonardo Beltrán, Board Member of Sustainable Energy For All Sampo Suvisaari, Regional Director, Latin America North and the Caribbean of Wärtsilä
10:15 NETWORKING COFFEE BREAK
11:00 FINANCING OPTIONS FOR MERCHANT PROJECTS AND PPAs
Moderator: Alan Sakar, Associate - Energy and Infrastructure at Clifford Chance
Panelists: Gerardo Pandal, Commercial Director of Vive Energía
Salomón Amkie, Director Head of Power and Energy of Citibanamex
Héctor Olea, President and CEO of Gauss Energía and Former President Comissioner of CRE
12:00 NETWORKING COFFEE BREAK
12:45 HOW TO MAKE MEXICO’S TRANSMISSION AND DISTRIBUTION NETWORK FUTURE-PROOF
Moderator: Héctor Rocha, Partner at EY and Deputy Leader for the Energy Sector
Panelists: Alejandro Preinfalk, Vice President of Energy Management at Siemens Mexico
Leopoldo Rodríguez, President of AMDEE
Nuno Inácio, Director General of G3R
13:30 NETWORKING LUNCH
15:00 REGULATING AND ENABLING THE FUTURE OF ENERGY
Panelists: Héctor Olea, President and CEO of Gauss Energía and Former President Comissioner of CRE
Francisco Salazar, Founding Partner at Enix and Former President Comissioner of CRE Rubén Hernández, Head of the Oil Products Unit at CRE
16:00 THE EVOLUTION OF ENERGY STRATEGY PRIORITIES OF LARGE INDUSTRIAL USERS
Moderator: Francisco Salazar, Founding Partner of Enix
Panelists: Ramón Basanta, CEO of ATCO Energía
Alejandro Blanco-Moreno, Co-Founder of Tradeon Energy
Irene Espinola, Global Renewable Energy Director of Grupo Bimbo
Francis Pérez, Director General of RAMADASA
Simon Plata, Power Automation and Digitalization Advisor at Emerson
17:00 NETWORKING COCKTAIL
KEY SPEAKER
ABEL HIBERT
Economic Advisor to AMLO Abel Hibert has held several positions in the area of economic advisory. He served as Deputy Director of Analysis at Vector Casa de Bolsa and as Chief Economist for Grupo Pulsar Internacional. Hibert also served as Commissioner at the Federal Telecommunications Commission. In addition, he has delivered lectures at various universities, including Tecnológico de Monterrey, Universidad Metropolitana de Monterrey and Escuela Libre de Derecho.
MEXICO’S ENERGY POLICY TO ALIGN WITH SUSTAINABLE DEVELOPMENT GOALS
The new administration is slowly unveiling its plan for a new energy model and sustainability is key to develop future projects and plans. Abel Hibert, Economic Adviser to President Lopez Obrador discussed the administration’s plans to follow the UN Sustainable Development Goals to develop a more sustainable energy mix in his keynote speech at Mexico Energy Forum, which took place on Feb. 20 at the Sheraton Maria Isabel hotel in Mexico City.
After the cancelation of the electricity auctions, uncertainty has fluctuated throughout the Mexican energy sector, as players wait for the government to communicate the energy policy for the next six years. Hibert explained that the Ministry of Energy, along with the Presidential Cabinet and the Ministry of Finance are working toward the 2030 Agenda and how the industry will accomplish the UN Sustainable Development Goals (SDGs).
The current status of the Mexican energy sector has a growing demand and need for the diversification of the country’s energy model. “There is an increase in energy consumption in the world and fossil fuels are running out. 21 percent of the electricity in Mexico is currently generated by clean energy, representing 30 percent of the installed capacity,” he said. “One of the main challenges Mexico faces is that many families do not have enough income to pay electricity bills.”
Energy consumption is growing in Mexico at a 3 percent annual rate and between 2015 and 2017, the sector received US$18.6 billion in foreign investment through three energy tenders. “In terms of natural gas, the rise in demand has led to a dependency on the importation of natural gas. At the moment, 84 percent of natural gas is imported, of which most comes from the US. Most countries do not import more than 52 percent of their natural gas and especially do not depend on one sole country like Mexico does on the US,” explained Hibert.
As 62 percent of electricity is currently generated through the natural gas, Mexico is one of the countries with the highest dependency in natural gas, ultimately leading to electric generation. Hibert explained that other countries have a more diversified and less risky energy mix. “Mexico will have to have investment from the private sector because PEMEX will not have the capacity to support such high demands.”
To further consolidate Mexico’s energy sector, the administration plans to implement a Smart Grid that will optimize the distribution of electricity in a more efficient manner, establish a storage market that will provide service to the entire supply chain and increase the promotion of renewable energy, as well as the issuance of CELs. “The government administration sees great opportunity in increasing energy production and securing the country’s energy supply. In the next six years the investment and contracts carried out by PEMEX will help consolidate the energy sector, as well as the investments obtained through the various exploration tenders by petroleum companies,” said Hibert.
The administration is currently carrying out work sessions with industry experts to evaluate projects and the new energy model for years to come, keeping in mind the SDGs. “The Ministries and President are taking time to evaluate and fully understand the best alternatives and solutions for the Mexican industry. We are in a stage of evaluation. These work groups are necessary to make better decisions and fully understand all of the impacts all scenarios will have,” said Hibert.
PRIVATE SECTOR A KEY PLAYER IN ENERGY TRANSITION
“In terms of natural gas, the rise in demand has led to a dependency on the importation of natural gas. At the moment, 84 percent of natural gas is imported, of which most comes from the US. Most countries do not import more than 52 percent of their natural gas and especially do not depend on one sole country like Mexico does on the US”
Abel Hibert, Economic Advisor to AMLO
The role of the private sector in the development of Mexico’s energy market cannot be understated. Private companies will be essential in the country’s road toward implementing clean energy projects, said Claudio Rodríguez, Head of Mexico City Office at Thompson & Knight, during Mexico Energy Forum 2019 held at the Sheraton Maria Isabel hotel in Mexico City.
During the opening presentation of Mexico Energy Forum, Abel Hibert, Economic Adviser to President López Obrador, said collaboration between the public and private sectors was essential for the industry’s development. This was a celebrated announcement among the panelists in the Diversifying Mexico’s Energy Mix discussion, although certainty was also highlighted as a necessity to move forward with projects. “Companies are willing to keep investing but the sector is still waiting for a clearer message from the government on how we will move on,” said Gerardo Pérez, Director General of EDF Renewables Mexico.
HIGHLIGHTS
KEY SPEAKER
CLAUDIO RODRÍGUEZ
Head of Mexico City Office at Thompson & Knight
Claudio Rodríguez, a lawyer, focuses on energy and infrastructure matters. He has represented developers, procurement firms, producers, investors, contractors, suppliers and multilateral institutions in all phases of development, M&A, and financing of energy projects. He is consistently ranked as a Leading Lawyer in Energy by Chambers & Partners, Global Chambers, Legal500, Who’s Who Legal and IFLR1000. He holds a Master’s in international business law from the University of Exeter.
According to Rodríguez, CFE has assumed a totalitarian role in the energy industry but there is still opportunity for private companies to collaborate in developing the market, a vision echoed by Leonardo Beltrán, Board Member of Sustainable Energy for All. “CFE knows best the needs and resources available in the country, as well as how to navigate the national economy. By allying with this entity, companies may reduce uncertainty in their investments and gain knowledge on the market,” he said. “At the same time, collaborating with the private sector could give CFE access to new technology and best practices to boost resources exploitation.”
Transmission, in particular, remains an unclear area for the industry. Renovation and development of new transmission lines remains the right and obligation of CFE but Pérez highlighted that opening this sector would be beneficial for evolving the energy matrix. Beltrán agreed by saying “economic development relies on the development of our transmission infrastructure.”
However, for Sampo Suvisaari, Regional Director, Latin America North and the Caribbean at Wärtsilä, this is not enough. He added that a focus on cogeneration projects is necessary to not rely solely on transmission capabilities. Similarly, he highlighted the relevance of power systems to combat intermittency in clean energy generation.
According to Pérez, the country will be in need of 60GW over the next six to seven years, which makes investment in all energy areas fundamental, and all panelists agreed on the part that clean energy projects will play in transforming the sector. “Costs in renewables have decreased beyond anyone’s dreams. Solar panel costs continue decreasing and the potential for this energy is way more than what we need,” said Suvisaari. “Wind energy costs have also lowered, making this the most affordable energy generation method.”
Rodríguez also identified President López Obrador’s social approach as an opportunity for more clean energy projects to develop, showing them as generators of cashflow and employment in areas with no access to other economic activities. “The new government has a defined social agenda, which will have an impact on the development of the energy market,” he said. For Beltrán, though, the private sector’s participation in his projects is fundamental. “Companies have the resources and technology to bring energy to communities,” he said.
Overall, all panelists were confident regarding the future of the industry and the inclusion of clean energy projects in the mix. “Change will come by itself, mostly guided by economic efficiency,” said Suvisaari, supported by Beltrán who highlighted that although there are always political changes, these should not affect economic models. “We must identify the energy model that best addresses Mexico’s needs,” he said.
NEW FINANCING MODELS, THE IDEAL PATH TOWARD ENERGY STABILIZATION IN MEXICO
The new energy reality in Mexico, the innovative financing models and the future of the industry during AMLO’s six-year period were some of the issues analyzed by the panelists present at the Mexico Energy Forum 2019, held on Wednesday at the Sheraton María Isabel Hotel in Mexico City.
The consequence of the cancellation of the fourth electricity auction was one of the topics covered during a panel of experts moderated by Alan Sakar, Associate
Energy and Infrastructure at Clifford Chance. Héctor Olea, President and CEO of Gauss Energía, was optimistic, even though neither he, Gerardo Pandal, Commercial Director at Vive Energía, or Salomón Amkie, Director Head of Power and Energy of Citibanamex, believe that long-term auctions will not be held in the next two years. “The previous model is no longer valid because it no longer exists,” said Olea. “We have to recognize that and understand the change and be optimistic, because in changes there are always opportunities, as demonstrated by the Energy Reform. New business strategies will appear in which many participants will find investment opportunities.”
Pandal asked for dialogue and understanding with the government in the face of this new reality. “We have a new scheme and we have to listen to the government, because Mexico is a democracy. I believe that the interests are aligned. Everyone is looking for good electric power service at a good price and we have achieved this in Mexico after many years. The Mexican model has already been tested in other countries, achieving a sustained decline in prices,” he said. In addition, he explained that it is necessary to cover all the country’s demand, which differs greatly depending on the areas. “The growth of electricity demand is above what was expected in areas like the southeast but there are also other areas of the country with a generation deficit.”
Regarding the new financing models, Sakar said that after the macroeconomic changes that Mexico has experienced in recent years, the financial sector should be one of the main promoters of this industry. On this subject, Pandal pointed out that it is necessary to look for new mechanisms with the financial sector to find attractive rates for the industry. Olea added another financing alternative, which could also be developed, at least in the solar sector. “Storage is an alternative to private investment versus monopoly in the transmission system. The private sector can participate in that area through storage.”
Amkie believes development banking has played a very important role in the financing of projects in Mexico, which is a key to the future of the industry. “Development banking has tended to be the pioneer in some financing in a more aggressive way than traditional banking,” he said. “But I think that traditional banking and development banking will go much more hand in hand in the future.”
KEY SPEAKER
HÉCTOR OLEA
President and CEO at Gauss Energía Héctor Olea has more than 23 years of experience in the Mexican energy sector. Since 2004 he has led Gauss Energía in the identification, development and structuring of investment opportunities for renewable energy installations. He served as Chairman of the Mexican Regulatory Commission and from 2016-18, he was Chairman of the Mexican Section of the MexicoUS Business Energy Council. He currently heads the National Association of Solar Energy. Olea holds a Master’s and a Ph.D. in economics from Rice University.
KEY SPEAKER
HÉCTOR ROCHA
Partner at EY and Deputy Leader for the Energy Sector
Hector Rocha covers the Energy business for LATAM North and is based in Mexico City. He has spent 18 years in the energy sector in Mexico, Asia, Middle East, the US and the North Sea. He has held multiple positions throughout his career, including as a field directional/ drilling engineer across Southeast Asia, Operational Performance Improvement Champion in Asia and the Middle East, General Operations Manager for Upstream projects in Japan, R&D Lead for Telemetry tools globally and Management Consultant.
PRIVATE-PUBLIC SECTOR COLLABORATION CRUCIAL FOR AN EFFICIENT TRANSMISSION AND DISTRIBUTION NETWORK
During the Mexico Energy Forum 2019, which took place on Feb. 20 in the Sheraton Maria Isabel in Mexico City, industry experts discuss the future of the country’s transmission and distribution grid and what needs to be done to integrate smart technologies.
Mexico’s grid is poised to welcome an additional 8GW from renewable energy projects. However, this achievement will not reach its full potential without the proper infrastructure to deliver the power produced to critical consumption points. “Mexico has over 100,000km of transmission lines, of which 50 percent are over 20 years old and only 8 percent has been constructed in the last five years. There is a growth of 1 percent when the accurately demand is of 3 percent,” said Héctor Rocha, Partner for EY and Deputy Leader for the Energy Sector.
As transmission corridors continue to become saturated, Rocha explained that the shutdowns we have already experienced will continue and that we will not be able to evacuate cheap energy unless the gap is bridged. “A saturated network generates problems to the consumer. If we strengthen it, we will be able to provide cheaper prices to consumers,” said Leopoldo Rodríguez, President of AMDEE.
Alejandro Preinfalk, Vice President of Energy Management at Siemens Mexico agreed that the gap must be filled and that the only way to achieve it is by working as a team. “We must have a robust, quality and flexible system that will allow the country to flourish,” said Preinfalk. “Using smart technologies will push the digitalization of the system and provide companies with data to monitor the status of the system and carry out predictive maintenance, reducing downtime and costs.”
Cybersecurity will play a larger role as the system becomes more digitalized. “We ensure the safety of the data and it is becoming the most important asset of any device. It is a real risk, especially in the transmission network,” said Preinfalk.
There is much work to be done to supply the country’s growing demand, but the panelists agreed the government will not be able to build the necessary infrastructure alone. “The government has a natural monopoly in terms of distribution and transmission lines. In regards to transmission, it should continue to have this role but the challenge is too large and there is no way that there is a budget large enough for the government to do it alone,” said Rodríguez. “The rules of the game have changed. We have to create new schemes and even if they are not called auctions or tenders, the private sector must be involved. The private sector’s role should support, especially when it comes to the large challenge the country has in terms of generation.”
“The rules of the game have changed. We have to create new schemes and even if they are not called auctions or tenders, the private sector must be involved. The private sector’s role should support, especially when it comes to the large challenge the country has in terms of generation”
Leopoldo Rodríguez, President of AMDEE
When it comes to distribution lines, Rocha stated that there are over 800,000 distribution lines in Mexico, and the number has decreased throughout the years. There are technical losses equating to 13,000GW/h and 18,000GW/h of non-technical losses, which means that over US$2 billion are lost due to these inefficiencies.
From an EPC point of view, Nuno Inácio, Director General of G3R discussed the uncertainty among players and the need for clarity. “The two main challenges are to increase
the number of distribution lines and the other is to modernize, but the main focus should be how to do it together. There are players who want to be involved and invest. It needs to be well defined, so that we can see the role we will play. There are plenty of solutions. We are available, there are many EPCs like us waiting and we are hopeful the projects will continue,” said Inácio.
INDUSTRY HAS NOT SEEN THE LAST OF CRE
Dissipating lingering fears, current and former CRE officers assured investors that the regulatory entity would not disappear. “For any government, regardless of political inclination, it is essential to have an entity that gives certainty to investors,” said Francisco Salazar, Coordinator at the International Confederation of Regulators and Former President Commissioner of CRE. “There must be professionals that are not subjected to changes in government administrations. This gives certainty to investors.”
On February 20, Mexico Energy Forum 2019 gathered three current and former CRE officers at the Sheraton Maria Isabel hotel to present industry leaders the reasons why CRE would not disappear, despite changes made by President Andrés Manuel López Obrador, including the cancellation of the long-term auctions.
Salazar spelled it out clearly: “CRE will remain for a long time and will be fundamental to the country’s goals for economic development. The Energy Reform made CRE a coordinated regulatory entity, giving strength beyond that of any Ministry. From a legal standpoint, Mexico has built a framework that guarantees CRE’s survival.”
According to Héctor Olea, President of Asolmex and Former President Commissioner of CRE, Mexico has been excellent in creating regulatory frameworks. However, the country fails to support these with proper instrumentation and operability. That is where CRE came in. After the crisis of 1994, Olea says CRE was strengthened to
work as a mechanism to boost foreign investment and allow the creation of IPPs. In 2006, the commission took the next step and detonated the clean-energy market. Finally, with the support of CENACE and the Ministry of Energy, CRE laid down the framework to develop long-term auctions. “CRE creates new markets that bring new opportunities to investors. Its latest venture is focused on energy storage,” said Olea. “The industry must rally to defend its value.”
At the moment, it is business as usual for CRE, according to Rubén Hernández, Head of the Oil Products Unit at CRE. “The regulatory framework remains and we are working on a regulatory package to offer certainty, promote investment and reduce the regulatory burden,” he said. Hernández even highlighted priorities for the commission including boosting natural gas production and the exploitation of energy sources. “We must make our energy mix more efficient so we do not depend solely on oil,” he said.
“The regulatory framework remains and we are working on a regulatory package to offer certainty, promote investment and reduce the regulatory burden”
Rubén Hernández, Head of the Oil Products Unit at CRE
Naturally, after the cancellation of the long-term energy auctions, uncertainty rose among investors regarding CRE’s future and its autonomy as a regulator. However, Salazar highlighted that Congress already tried to pass a law that gave new attributions to the Ministry of Energy thus removing part of CRE’s autonomy, but that was rejected due to pressure from the industry. Furthermore, he said auctions will have to be reactivated, provided the law does not change.
“CFE cannot buy energy directly from its own generation division. Though this is happening at the moment, it is only part of a transition period that considers legacy contracts and leads to greater competition,” said Salazar. “If the law were to change, tariffs would go up and that would be detrimental for the government.”
President López Obrador has remained true to his word of not changing the law, which should be an indication of auctions eventually returning, according to Salazar. He acknowledges that CFE has been strengthened under the new regime but he sees this as a boost to the company’s public finances, which opens the door for CRE to collaborate in determining efficient costs and ensure proper tariff implementations to protect users, companies and the government itself. “CRE does not undermine competition for anyone, including CFE,” said Olea.
ENERGY EFFICIENCY TO GUARANTEE SUPPLY
Mexico needs greater energy efficiency, according to the panelists who participated in the closing panel of the Mexico Energy Forum held at the Sheraton Maria Isabel Hotel in Mexico City this Wednesday. “Energy efficiency guarantees energy security in the country since the distribution network is saturated, which makes it difficult to guarantee supply,” said Francis Pérez, Director General of RAMADASA.
According to Francisco Salazar, Founding Partner at Enix, in the year 2040 the energy demand will reach its peak, so it is necessary to start taking measures that anticipate the future. One of those processes, Pérez said, is the
modernization and digitalization of processes. “It is necessary to analyze the energy demand of companies in a thorough way to know if we are using energy well. We need continuous improvement processes and expand digitization to achieve better results.” Pérez talked about the Nestlé case as an example: “Nestlé improved its production while its energy consumption decreased,” she said.
Simon Plata, Power Automation and Digitalization Advisor at Emerson, opted for the digitalization of processes to improve efficiency. “These processes help to make plants more efficient while allowing greater operational flexibility,” he said. He also emphasized the responsibility of both producers and off-takers. “When we talk about energy efficiency, we always see the issue from the consumer’s point of view, but the producer must also be subject to this efficiency. What we want is to achieve a minimum level of emissions for the same production rates.”
A model proposed during the panel is that used by Bimbo, one of the companies most committed to energy efficiency and that has created a mix of solar and wind energy. “It is not good to marry a single technology or scheme, since that way it is impossible to achieve a 100 percent energy consumption from renewable sources. We have to generate the right energy mix to reach our objectives,” said Irene Espinola, Director of Global Renewable Energy at Grupo Bimbo.
Ramón Basanta, CEO of ATCO Energía, asked for caution before the process of political transition that Mexico is going through, following international best practices. “In other countries the establishment of a mature electricity market takes between seven and 13 years” and Mexico has only just begun. “I think that we should not be alarmed so much, since it is normal that after a political change of these dimensions the legislation is revised. The objective, however, is that in the future supply and demand will set prices.”
For Alejandro Blanco-Moreno the ideal protocol would be that both the private sector and the public sector, in this case CFE, continue to grow hand in hand. He ventured that in Mexico it is likely that private investment in the energy system is greater than that of CFE if transmission and distribution are deducted from the equation. What is needed, in his opinion, is “certainty and a legal standard for investors to continue betting on Mexico.”
KEY SPEAKER
IRENE ESPINOLA
Director of Global Renewable Energy at Grupo Bimbo
Irene Espinola oversees Grupo Bimbo’s renewable energy initiatives at a global level. She ensures the company complies with the correspondent regulatory frameworks as well as mixing strategies to optimize energy use and minimize costs. She has managed Piedra Larga’s wind farm project since 2012 and was responsible for the negotiations that resulted in a virtual PPA contract in the US. Espinola holds an MBA from EGADE Business School and a Bachelor’s in industrial engineering from Anahuac University.
Mexico Energy Forum is the industry’s premier event, bringing together key national and international players involved in the transformation of the country’s Energy industry. The summit provides an invaluable platform to present an insider’s perspective through constructive debate on key topics, combined with targeted and effective networking opportunities.
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Our networking events, which are exclusively available to our top clients, are a must for C-level professionals who want to expand their business, improve their contacts or simply gain insights from other key stakeholders in their industry.
Networking Breakfast
The ideal setting for a gathering of up to 25 industry executives to discuss key topics relevant to their sector while energy is high.
Networking Lunch
An intimate working lunch with up to 20 sector leaders designed around a relevant discussion topic and sure to lead to new ideas and ventures.
Networking Cocktail
A larger, evening event and the perfect opportunity to unwind over drinks and canapes. Our cocktails feature a VIP speaker invited to provide insight into a trending topic.
Exclusive, by invitation only
Network with the people and businesses that matter to you
C-level participants
Value-added opportunity to discuss trends and strategies
Speaker presentations
Topics and themes specific to your business segment
THIS IS HOW WE DO IT
Filtering out the most important information has become a critical success factor for business and political leaders alike. Rather than time or money, attention has become the scarcest resource. We are committed to delivering the right information to the right people in the right format. This is how we do it:
• Cutting-edge
• Dedicated editorial team with an in-depth understanding of the Mexican Energy industry
• Editorial
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of the Mexican Energy industry
BE AMONG THE INDUSTRY LEADERS
WHY MEXICO ENERGY REVIEW?
In this changing environment, reliable and relevant information is crucial to take full advantage of both current and emerging opportunities within the country’s energy industry. By connecting key stakeholders across the Mexican and international public and private sectors, Mexico Energy Review is dedicated to accelerating the exchange of essential industry information that will drive the Energy industry’s development. Published annually, Mexico Energy Review features the perspectives of the leading players in the industry, providing a comprehensive overview of the
Nominate a company or submit a guest article on our website: www.mexicobusinesspublishing.com/energy
