Hans Kohlsdorf
Founding Partner
E2M
/
View from the Top

E2M: Cheaper and More Efficient Energy Solutions

By Alejandro Enríquez | Thu, 05/21/2020 - 14:00

Q: What power market trends have yet to permeate the Mexican industry and how does this challenge Mexican automotive companies?

A: Large-scale renewable generation is changing the energy mix in a significant way while reducing the cost of electricity. Another major trend at the global level is distributed generation (DG) or on-site generation (OSG). Electricity should be generated closer to where it is consumed. In Mexico, this trend toward DG is well underway. Having said that, there are already many very good examples where the best source of energy for a manufacturing plant is either on-site or nearby. DG also solves the problem of an electric grid that is already stressed and has limited capacity for new loads.

Many technological developments in the energy sector are impressive. Mexico is taking advantage of its abundance of natural gas as the pipeline network is expanding rapidly. Some automotive processes require heat and combined heat and power (CHP) solutions are being built at a fast pace. Solar power as OSG is growing strongly and relatively small applications of 2MW, 5MW or 10MW become the new standard. Battery applications for commercial and industrial users are being explored and deployed to replace diesel engines or other uninterruptable power sources, to stabilize the energy quality at a required level or for peak shaving applications.

Exploring the advantages of nearby generation plants and OSG represents a great area of opportunity for automotive companies. For the Mexican automotive sector in particular, there are several advantages. One is the high radiation levels that make solar power even more competitive in the country. Second, is the availability of natural gas and biogas. All new engines and turbines work perfectly with a mixture of natural gas and biogas. Thus, many industries close to water treatment plants or waste centers have a big opportunity for generating energy from biogas. Finally, if a company is worried about energy quality and brownouts or blackouts, then OSG can provide a solution.

Q: What are the most significant demands made by automotive companies, including both OEMs and suppliers, to qualified suppliers such as E2M?

A: In Mexico, the major concerns are energy availability and the cost of electricity. Often, the challenge for most international companies with limited know-how of the Mexican electric market is how to organize an effective energy purchasing tender. As an independent supplier, E2M has been chosen by many companies to organize their energy purchase tenders. Experienced industrial companies know quite well the concept of demand control, which in many cases, together with energy efficiency programs, can have a bigger impact on savings than the tender process itself. E2M supports customers in defining the best energy strategy and accompanies them during the whole implementation process of energy efficiency measures, demand control and energy tenders.

In the energy sector, the new economy is moving away from vertically integrated companies where the one generating the energy is the one delivering it to the final user, which is the business model of state-owned utilities. Independent brokers like E2M operate a similar model as the insurance broker. We help our customers to choose the best available option. In contrast, the traditional, vertically integrated utility is happy if customers consume more energy.

Q: What is E2M’s strategy to help manufacturing companies control their energy costs as they integrate Industry 4.0 practices?

A: Industry 4.0 helps to drive energy efficiency measures that significantly reduce energy consumption. Our energy market data platform, MEM on Cloud, can interact with AI-driven Industry 4.0 solutions and create an even greater positive impact. In addition to the antiquated energy options offered by vertically integrated utilities, there are new interesting business models to explore. In our experience, clients that are already implementing Industry 4.0 tend to be early adopters of more efficient energy purchase tenders or big data-based energy control measures.

A major improvement supporting OSG is the smart grid solutions and the Internet of Things that come with these. With OSG, companies are perfectly able to integrate their operations because they manage their own energy. If the company can control its processes, it can control its energy consumption and thus decrease its energy costs. If the company requires a grid connection in addition to its OSG to cover peak loads, for example, it becomes an energy prosumer (producer and consumer). E2M is present in both segments, energy purchases and energy sales. This is how we can help companies to optimize their energy portfolio and adapt it to their production and product-delivery obligations. E2M does not own any generation assets, which is why it is considered fully independent.

The energy cost and the efficient use of energy are two major concerns for automotive companies. Our focus is to reduce the total energy costs for companies by helping them to manage their energy portfolio and their generation plants, leveraging in that way potential efficiency gains.

Q: What are the most important regulatory changes that must take place for smaller automotive companies to adopt green energies?

A: I believe businesspeople are responsible for their own business. A company waiting for the government to take action will never succeed. Having said that, today’s Mexican business environment gives companies more flexibility than some European countries do or even the US. Although there are some negative aspects, we enjoy an environment that allows companies to implement all necessary measures to work more efficiently in the energy sector. Mexico has a long history of private energy generation. The mining industry generates its own energy, as it operates in remote locations, as does the paper industry, which requires large amounts of steam. The great relevance of DG, bringing energy closer to the consumer, will eventually reduce the overload of the distribution and transmission grids.

Q: What steps must be taken to reduce the carbon footprint of Mexico’s automotive industry?

A: There is a major advantage in the automotive industry. All companies take the reduction of their carbon footprint very seriously. All of these companies are concerned about the environment because the consumer values environmentally conscious companies. Therefore, reducing carbon and water footprints is a cornerstone of social responsibility for many companies. At E2M, we act as a balancing agent, adapting the intermittent renewable energy generation to the specific consumption needs of our customers. A strong commitment to social and environmental issues is a major characteristic across the automotive industry. Detailed analysis show that financially these efforts pay off in a very short time.

Q: What role will E2M play in increasing the energy efficiency of Mexico’s automotive industry?

A: At E2M, we help our customers find the best energy solution for them, with the goal of becoming a long-term partner. We are like an insurance broker. When you buy insurance, you go to the broker who knows the best insurance companies. E2M is that experienced electricity broker that your company needs.

Energy to Market, E2M is a pioneer service provider and consulting company in the wholesale electricity market. The company has two divisions, one is a qualified supplier under CRE permits and the other a generator under CENACE

Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst