STORY INLINE POST
Q: What were the opportunities and incentives that led Burns & McDonnell to start operations in Mexico?
A: Burns & McDonnell is an outstanding engineering company in the electricity sector. It wanted to expand to the Mexican market for two reasons: because Mexico is a neighboring country of the US and due to our belief that the country needs quality engineering infrastructure to nurture the projects that the electricity sector will require for a sustainable future. We believe we can make a big difference; we have talented engineers implementing top technology to offer quality services.
The Mexican market is attractive because of its size. Plus, Mexico is a commercial partner to the US and Canada, so it is only natural that companies from the US look at the opportunity here. Moreover, Mexico has more logistical advantages than many other countries. The COVID-19 pandemic highlighted the vulnerability of supply chains, which is why the company’s plan is sustained by nearshoring as a near and medium-term alternative. We believe that this experience will convince US companies to come to Mexico before taking their production to the East.
Q: What is the make-up of the company’s portfolio in Mexico?
A: Burns & McDonnell has 10 global practices in total, of which four are in Mexico. The company is involved in energy, information and steel projects and we are close to entering the food business. Electricity generation, transmission and distribution as well as developing power plants are among our biggest specialties in the country.
Q: Why should companies prioritize investment in sustainability and ESG strategies?
A: First of all, the world demands it. Secondly, it is important to understand that climate change does not only mean temperature imbalance, as it provokes an uncontrollable environment prone to natural disasters. Moreover, pollution coming from carbon dioxide is harmful to everyone’s health, so starting to enhance energy consumption outside of carbon sources will be better for everyone. If we stop polluting, we will stop needing to clean up so much, gaining a more sustainable environment.
Many of the global initiatives that look to reduce emissions are forcing companies to stop polluting but we truly need to move further than this and reach the point where everything we do is clean and sustainable. That is why the company’s vision has decarbonization as the original and final pillar.
Q: How could Mexico better approach and increase its renewable power production?
A: Government and industry must come to an understanding regarding what is next. With the previous administration, a route forward was established but the new government has decided that maybe that path needed to be altered. The industry needs a regulatory framework that allows renewable energy to be widely developed in the country.
The private sector will have to then adopt the new regulation to expand renewable power production. This regulation should be world-class: not overly strict, and able to foster a healthy economy built on renewable energy.
Q: What role should private producers play in decarbonization strategies related to power production?
A: Private producers will have to be ready to invest in environmental responsibility and in the communities where they will settle. In regions with great economic potential for renewable energy development, joint action between the government and the private sector to create a social infrastructure should be established. By doing so, social differences are not exacerbated when large amounts of private investment arrive. For example, when wind energy arrived in Oaxaca, the people who could rent or sell their land to wind farms were the happiest because they benefited from the investment. Nonetheless, state investment infrastructure was lacking, which impeded the population from farther away to benefit from the advantages of better health and education infrastructure that private companies introduced.
The government and private sector should work hand in hand to get the most out of areas with great potential to develop projects. Ideally, private companies promote productive investment, while the government creates a development hub with social investment to eradicate social inequality and its subsequent societal tension.
Q: What is the future of utility-scale wind and solar in Mexico, both in the short and long term?
A: The sector has seen mass-scaled development due to the electricity auctions and their great results. In the future, the government will likely appoint some specific regions for the development of more renewable energy projects. In the past, investors could choose where to invest; now, the government will determine the time and the place as it takes on a much more central role in the sector.
Q: What is the potential of alternative renewable energy sources like nuclear or geothermal power in the country’s energy transition efforts?
A: Nuclear energy is clean and does not have repercussions on the environment regarding emissions. Moreover, it is a constant, highly stable source of energy, which Mexico needs to balance its grid system. Nuclear power should become one of the most relevant elements in the planning of Mexico’s future electric system because it helps us avoid polluting and it provides the constant energy needed for an electric system to function. The big nuclear reactors from yesteryear are gone, replaced by small modular reactors that produce from 70MW to 100MW. These reactors are gaining popularity in the US and the world.
Q: How is Burns & McDonnell encouraging these alternative power sources throughout its EPC division?
A: As engineers, through our EPC delivery team, we are actively following the construction of small nuclear reactors that are more controllable, safer and that can be installed faster and at an attractive cost. In the past decades, the price of a nuclear plant skyrocketed. Consequently, companies would lose control of the time and money spent on their construction. With this smaller alternative, cost and construction quality will be easily controllable.
Burns & McDonnell is a US-based consultancy and EPC company with operations in multiple industries. Its operations in Mexico center around energy and infrastructure.