Aaron Muniz
CEO
Proterra Capital
/
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Deep Market Knowledge Bolsters Value for Clients

By Cas Biekmann | Wed, 09/15/2021 - 09:34

Q: How does Proterra provide an added value for its clients?

A: To deliver added value to our clients, offtakers and the value chain, we have been developing our market knowledge for the past four years. We have studied market trends, followed regulatory changes and kept tabs on possible downstream changes to inform strategy development and fulfill the financial expectations of our investors. Ultimately, this preparedness allows us to not only develop the best products for our clients but helps guide our own company goals and decisions.  

 

Q: How would you characterize confidence in the regulatory environment and its impact on your business?

A: Unsurprisingly, there is not much confidence in Mexico’s current regulatory environment. Consequently, this hurts our ability to maximize value for our offtakers. Nevertheless, we are certain that in the coming years there will be more flexibility and we anticipate a focus on improving the energy matrix with the participation of private generation. Furthermore, as centralized assets become the market’s focus, this will allow us to successfully compete with bigger power producers. Our company is thriving in our energy market niche but we look forward to a more competitive market with more players so we can offer our clients even more attractive solutions.

 

Q: Why do big companies choose to work with Proterra Capital to resolve their energy issues?

A: Our ability to attract large clients is a reflection of our work and genuine effort to generate the best possible solution. We work closely with our clients, earnestly trying to understand their concerns so that we can deliver a flexible solution that is sensitive to their needs, instead of applying a standard model for every client. This meticulous process and continuous effort have helped solidify our position in the market. In addition, our technologies portfolio allows us to work with different industries that source their energy supply from the wholesale electrical market and find solutions for them as well. Overall, the main takeaways are preparation and authenticity. These two factors have guided our work, allowing us to engage large clients and become a formidable competitor.

 

Q: As a qualified supplier, what are the advantages of getting a project on-site in comparison to an off-site clean energy generation contract in the form of a PPA?

A: We foresee distributed generation becoming a standard part of the intelligent energy grid, capable of managing not only on-site generation but its interaction with the smart grid. Fundamental to that is energy storage. Globally, after its actualization, we anticipate a large percentage of energy consumers to become “prosumers,” representing a mix of energy generation and storage interacting with the smart grid. Our tendency to gravitate toward on-site projects is tied directly to the known benefits, including stable and predictable generation, evading possible intermittency disruptions, minimizing accidents and bypassing transmission fees. Given these remunerative benefits, we expect distributed generation and on-site storage will become the global standard.

 

Q: What are the prospects to grow the cogeneration market in the short term, given its clear benefits?

A: Cogeneration is not an option for everyone given the volatile prices of commodities like natural gas. Renewable technologies will often be a better option, considering the associated marginal cost is close to zero; however, there are exceptions, such as those companies that can benefit from the superfluous heat that is produced. Furthermore, the viability and implementation of this technology is also contingent on how strict the offtakers’ policies are and how quickly they want to reach net zero emissions.

That being said, we understand that natural gas will be used as a transition fuel to a green economy, helping companies produce cleaner and stable energy under the 0.5MW limit established by the regulatory framework. We recognize the potential of this sector but offtakers are still unsure about the technology. Market actors need to do a better job of explaining and highlighting the benefits of this technology. If successful, we can see this market expanding by two to three times in the next three years.

Overall, the adaptability and manufacturing of cogeneration will depend on the needs of the individual client. Given its recognized benefits, we expect the sector to increase significantly as clients learn more about this technology.

 

Q: How do you assess the Mexican market’s knowledge of energy efficiency and how does the company use this to explain to customers what they need?

A: The initial offer process starts with an observed demonstration with our project managers, which is followed by an in-depth analysis of the potential client’s energy consumption and processes. We then reference that to our matrix of solutions. From there, we choose two or three possible solutions and adapt them accordingly into a simple contract that considers the financial metrics established from the outset. Once an agreement is reached, we move onto phase two, which entails the education of the client’s staff, which can be a challenge, especially for large clients given the complexity and required depth of understanding.

In addition to this, in 2022, we are launching software that will help companies automatically quantify their carbon footprint, establishing where they stand and tracking the progress made as new technologies and strategies are applied.

Proterra Capital is an investment fund and asset manager specialized in the development, construction, financing and operation of decentralized renewable energy assets.

Cas Biekmann Cas Biekmann Journalist and Industry Analyst