DG Drives Mexico’s Renewable Market During Utility-Scale Slowdown

Q: What were the opportunities and incentives that led to the creation of EMMI in 2014?

A: From the beginning, EMMI sought to meet the needs companies had regarding the construction of electromechanical projects during the beginning of the renewable energy boom in Mexico. EMMI was created as a full-service provider for renewable energy projects, including solar, wind and thermoelectric power plants. We found the opportunity to create a company that shared the same objectives as its clients so we could promote renewable energy projects together, providing the highest quality and time-efficiency. We started operations in August 2014 developing wind projects.

Q: How has EMMI adapted its business model to remain competitive during the slowdown of renewable energy projects in Mexico?

A: Our main strategy has been to adapt to our clients and their needs. We started our operation performing only construction, then we oriented our expertise toward the provision of operations and maintenance (O&M) services. The market also urged us to launch our Distributed Generation (DG) business. We have been able to adapt to the environment and take advantage of the opportunities that solar energy offers on a small and medium scale. There are many utility-scale maintenance projects, as well as a growing market for DG. Therefore, we have adapted our offer and grown our business despite the slowdown.

These periods of uncertainty are short-lived. EMMI trusts that this slump in renewable development will eventually pass. We know that both solar and wind energy have great potential in Mexico. The company will continue to support the sector and promote the economic and social benefits that the energy transition provides. Right now, we are experiencing a summer with record-high temperatures as well as lengthy droughts, according to the International Energy Agency (IEA) over 85 percent of its associated member countries are exposed to a medium or high level of climate hazard risks and Mexico is among the highest-ranked. This should allow us to reflect on how urgent it is for us to take action to combat climate change. Sooner or later, we will have to invest in renewables. EMMI will be ready to support these projects.

Q: How has EMMI's operation been transformed by the restrictions regarding permit issuances?

A: The lack of permitting does not affect our current operational focus but it does prevent our clients from starting the development of utility projects that are ready to build. EMMI has tried to adapt as best as it can to the market. We have expanded our focus on O&M services for utility projects that are already operational. In addition, we are developing DG projects below the 0.5MW threshold for the Commercial and Industrial (C&I) niche. The regulations for DG have not been modified. If there are delays in permitting for these types of projects, it is more due to external factors than policy matters.

A well-trained technical team that knows how to resolve the different problems that may arise during the day-to-day permitting process has also been essential for our strategy. This makes it easier to navigate regulation and cope with permitting resistance. Once the rules are clear, the only issue left is to fully comply with these requirements, which assures a higher possibility of success with the regulator.

Q: How have EMMI's O&M services evolved?

A: The large projects EMMI constructed, such as Puerto Libertad, Cuyoaco and other DG projects, require O&M services. Our O&M business line has consolidated and added more value for clients. This has allowed us to keep a steady working pipeline, which is not limited to renewable plants but also includes industrial plants and electrical systems. Furthermore, after we develop the complete DG project, we also operate and maintain the plant, ensuring it remains in optimal condition. EMMI remains close to its clients after construction finishes, allowing them to focus on their business while EMMI oversees their power production operation.

Q: What is the potential of DG for the C&I segment?

A: Today, DG is the most accessible power production option for the public. It is the best tool available in the short term to achieve energy savings in any industry. EMMI focuses on DG projects for the industrial segment between 0.3MW and 0.5MW. Our clients consume much more energy than this but Mexican regulation prevents our clients from producing electricity beyond this boundary. Nevertheless, even with the production limit, they generate attractive savings. What is more, the compliance with 2030 Agenda for Sustainable Development, ESG criteria and decarbonization goals that many international companies and their stakeholders pursue has become a relevant incentive for investment in DG, pushing the market's growth.

Q: What can be expected from wind energy in Mexico in the coming years?

A: Wind-based power production must occur through utility-scale projects. Mexico has strong wind power potential, which remains unexploited. States such as Oaxaca, Tamaulipas, Nuevo Leon, Guanajuato and Coahuila, to name a few, could boost wind and benefit from the renewable industry value chain. For the time being, we can only wait for policy conditions to improve so that utility-scale project development can be resumed. We expect this to happen in the short term.

Q: How is EMMI moving into Battery Energy Storage Systems (BESS)?

A: Energy storage has developed exponentially in recent years. More cost-competitive technologies are emerging to expand the use of batteries for renewable power projects. EMMI has several partners to provide storage technology to its clients as part of its DG solutions. We also operate hybrid systems, where we can combine solar electricity generation and energy storage. The configuration of DG systems together with batteries allows our customers to increase their profitability and renewable energy consumption.

EMMI is an EPC company founded in 2014. It specializes in the development, construction and maintenance of renewable energy generation and infrastructure projects. It has experience in solar and wind energy, energy storage systems and electromechanical infrastructure for industry and water treatment.