Corporate Growth Strategy Integrates Renewable EnergyWed, 02/21/2018 - 16:55
With Mexico’s new energy market well underway, many companies are beginning to see the emerging opportunities, even those whose natural strategy does not include energy, such as EPC and infrastructure companies. But according to David Torres, Director General of Mexican EPC TORDEC, companies with experience in Mexico will have the upper hand. “TORDEC has been building energy and infrastructure projects in Mexico since 2005,” he says. “Compared to an international EPC company, this gives us certain advantages in areas such as labor, union relationships, local supply partnerships and knowledge of the Mexican legal framework, to name a few.”
TORDEC is not strictly a newcomer in the energy industry. It participated in the Etileno XXI project for PEMEX and Braskem IDESA, completed a pumping station for Gas Nieto in Tuxpan and built a natural gas compressor in the Burgos area. To take full advantage of all the energy market’s business schemes, while prioritizing private PPA developers in need of an EPC company, TORDEC is also actively participating in utility-scale bids and sending EPC service offers to longterm public-auction winners despite this niche’s intensive competitiveness. And Torres says TORDEC has also been eying solar and geothermal energy for some time.
The issue TORDEC has come across has been accessing financing, but Torres says the company is overcoming this hurdle. “We are about to sign a joint venture with international players to be bankable in our bids,” he says. “The engineering required for solar projects is not rocket science but banks want to see proven experience, so we are partnering with seasoned players to meet the developer’s requirements.”
TORDEC’s immersion into the industry comes at an opportune time since 2016 was the year that solar became the cheapest power source in the auctions, coupled with the country’s rich solar irradiation levels. “The stage is set for what should be an overwhelming adoption of solar energy and international players are showing great interest in the long-term electricity auctions,” says Torres. “The only missing link between the present and a future where 80 percent of Mexico’s electric power is produced by renewables is the development of reliable and cost-effective energy-storage systems.”
Torres believes the regulators should take a closer look at the track record of other countries that experienced a similar transformation involving the liberalization of their energy sectors and the introduction of wind and solar energies. “As with other countries, Mexico’s electric grid is constantly evolving to respond to natural changes, such as population growth and economic health,” he says.
Other countries, Torres adds, can also take note of Mexico’s best practices with its grid network, like keeping the grid under government control. “Other countries that tried privatizing the grid did so only to nationalize it again a few years later,” he says. “This happened because companies were competing and maximizing profits, while neglecting the grid’s health. Every government should have the political will and the humanitarian obligation to keep the electric power running smoothly, keeping this responsibility out of the hands of the private sector.”
The company is also experimenting with new business models, such as lean construction, to constantly improve processes. Lean construction is the industry’s effort to integrate lean manufacturing, which was developed by Toyota for the automotive industry in the 1970s. This methodology implies higher quality and lower cost, as well as faster delivery times. “We have begun testing some of the tools that lean construction offers and have seen astonishing results,” says Torres. The “Last Planner” tool, for example, is designed to make every single person in the construction site aware of what needs to get done on a day-by-day, week-by-week or month-by-month basis. This helps develop communication within the team, as well as a sense of accountability for every individual in the organization. But Torres says this is a more long-term goal. “We are setting everything in motion to become the first Mexican company certified in lean construction but that is still years away,” he says. “It is better to start by using the tools we have and to develop a measurable impact, rather than pursuing things that take too much time.”