Vicente Magaña
President and Director General
View from the Top

Digitalization-Driven Growth, a Need Beyond a Dream

Wed, 02/21/2018 - 15:27

Q: How do you expect digitalization will change Mexico’s energy infrastructure?

A: Digitalization will change not only Mexico but the entire world. By 2020, we expect that 30-50 percent of the jobs around the globe are going to be related in some way to digitalization. With a strong focus on developing that concept, at ABB we are comfortable with the change. That is precisely the added value we want to offer to the country. With a production basis that is shifting from conventional resources to renewables, a transmission and distribution grid that requires an overhaul and the concept of smart grids, digitalization is a critical concept for Mexico. Furthermore, proper grid digitalization will not only allow Mexico to cope with renewable and distributed generation projects, but it will also improve the country’s energy security by increasing the ability for it to integrate storage systems and allow for the creation of new business models in the market.

Q: What business opportunity does ABB find within the concept of digitalization in Mexico?

A: By 2020 we expect that there will be about 26 billion devices connected to the internet. Taking this into consideration, the management of those devices and the proper digitalization of the grid to cope with them will be crucial. ABB is already working with its ABB Ability Platform to bring together all the required digitalization services in one place. With it, predictions can be made, such as when a transformer is going to fail, its behavior and what predictive maintenance will be required, all in favor of a stronger grid.

PRODESEN expects an investment of up to MX$2 trillion in the coming 15 years to revamp Mexico’s energy industry. Of that amount, 19 percent will go to the transmission and distribution sectors, and the rest mostly to renewable generation projects. Although renewables provide social benefits, they also introduce problems to the grid. As ABB has installed most of the cutting-edge stabilization systems in the world, we are looking to also implement them in Mexico.

Q: How can ABB support CFE’s new added-value business model?

A: Taking a look at what CFE has been doing, the company is really putting a stake in the ground and moving toward excellence. In this regard, CFE has strong objectives for the reduction of losses, both in its technical and nontechnical versions. The company is working really hard on bringing those losses down from the current 13-16 percent of losses to the world average of around 6 percent. The implementation of digital meters is one of its first actions in pursuing this goal and ensuring that consumers of energy can also become producers and sellers of energy.

Q: How does ABB bring the best solutions in the world to the Mexican market?

A: Mexico had a vertically integrated company, covering every aspect from power generation to distribution. Now we are going to see a much more open but complex grid. To handle these complexities, at ABB we spend about US$1.5 billion annually on R&D, and we are looking to spend even more. To further strengthen our position, we are developing strategic alliances such as the ones with Microsoft to develop a cloud platform and IBM to work on artificial intelligence. At ABB we understand that investing in our own R&D is not enough. Innovation is driven by creating alliances that provide a strong portfolio of projects that can be implemented later on.

ABB has a large industrial complex in San Luis Potosi, which is a unique location that offers services to the entire Latin America region. We also have a strong R&D center at this location. Among the many innovative solutions that have been developed is a mid-voltage solar panel that can be used directly for distribution purposes. To achieve these kinds of innovations we have a nurturing team composed of specialized seniors working together with young entrepreneurs.