The Cheapest kWh Is That Which Is Not Used at All

Q: What is the general philosophy that led to the founding of S2G Energy?

A: S2G Energy was founded in 2015 based on the idea of energy independence and transforming the environmental footprint into value for commercial and industrial (C&I) clients through the use of digital technologies. We work with Mexico’s second-largest restaurant operator, the largest agricultural industry exporter, as well as with commercial and retail banks.

Q: What would be an example of an implementation of the company’s technology and its benefits?

A: For instance, in the agriculture industry, the packing process is located close to the field. For the most part, in these locations, energy quality is often mediocre, leading to instability for these energy-intensive processes. Refrigeration and sanitization are essential, for example. These companies produce commodities; therefore, their competitiveness is tied to the amount of energy and water they use and how this information is disseminated to the end customer. In Japan, for instance, the amount of energy and water used to create the product needs to be declared. The faster and clearer this declaration is processed, the more competitive the commodity becomes. In an average packing process, S2G installs 250 energy monitoring sensors and around 100 water monitoring sensors. With this information, we ensure that the sequencing of heavy equipment is correct. 

Another strategy we apply in this area is utilizing the time-of-use benefit. During peak hours, we set up alerts for phones or computers so that operators can avoid running non-essential energy-intensive processes. 

Q: What are the hardware and software characteristics of S2G’s operations?

A: Efficiency services have been available for years, but digital efficiency services belong to an entirely different conversation. In regard to hardware, we provide passive and active components. IoT-based wireless monitoring sensors make up the passive elements, which are connected to a secure local network. In this area, we have a partnership with Centrica Business Solutions, part of the wider Centrica group, and deployed more than 4,000 of these sensors so far. The sensors monitor magnitude and quality of energy.  Another characteristic is the control element, where we work with multiple OEM platforms and integrate cost-effective control technology. We also integrate smart thermostats and the data present in legacy systems as part of our control system for air conditioning and refrigeration. S2G differentiates from the rest of the competition in how we can put together a specific solution to solve a particular job for our clients, such as charging commercial electric vehicle (EVs) fleets during low-cost energy hours for global CPG’s.

On the software side, we have different stacks for information, analytics and interaction. For the latter, we have our own bot that interacts with any chat application, especially if our algorithms detect an anomaly, such as heavy equipment running during peak hours or low occupancy with excessive air conditioning use. The Microsoft Azure cloud computing service often serves as our data backbone.

Q: Experts point out that Mexico’s digitalization is lagging the rest of North America. What is needed to spark this process?

A: We need a combination of stronger use cases, payback periods and efficiency. After all, efficiency has a strong effect on the return of investment needed for digitalization. The connection has to be understood in a macro context. Mexico’s energy market is quite young, beginning from 2014 onward. Previously, energy consumption was easily predicted through regular tariffs, making it a transferred cost. This situation no longer exists. We have seen that where the situation is fixed, incentives or pressure to become more efficient are absent. In the case of Germany, the mission to improve efficiency automatically led to the incorporation of green technologies in the energy matrix. The economic growth of the country and its electric consumption was decoupled. In Latin America, this is not the way we think. Efficiency has been considered a secondary conversation. Nevertheless, the new leadership in the US could put everyone in sync, in my opinion. Awareness of the importance of energy efficiency is therefore essential. Even though green energy is cleaner, the cleanest energy is that which is not used at all.

Q: How will the company work in the Mexican market to build a strong case for international expansion?

A: Our plans go beyond Mexico, just like those of many other digital companies. Mexico will remain our base due to its geographical location, talent and competitive cost. It is the remote-control tower from where we plan to drive digital energy efficiency services to customers around the world. To achieve this, we need access to data through sensors, either our own or from the existing data nodes at our customers. Once this is in place, we can create customized solutions that will talk a company’s business language. kWh will be correlated to the products and services produced. But to accomplish this level of personalized customization, we need to be based in Mexico. For now, we need stronger use cases and faster ROIs. The challenge is that our customized solutions are not easily scalable. Agriculture and retail banking belong to entirely different sectors, for instance. Building customized solutions ensures ROI to a certain point. Our target is to select the most interesting jobs to develop and then scale them. We are focusing on three pillars: industrial processes, intensive retail operations and EV commercial fleets. Mid to low sophistication in energy use, multiple site availability for benchmarking and owning legacy assets are three factors we look to evolve as well.

S2G Energy operates as a digital energy optimization partner for companies around the world, offering both notable short-term results and a path to complete sustainability toward the future through the use of digital energy efficiency services.