José Fernández
CEO
Grupo Dragón
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View from the Top

Dreaming of a Smarter Energy Infrastructure

Wed, 02/22/2017 - 14:49

Q: What new areas of opportunity has Grupo Dragón identified in Mexico’s power sector?

A: We see great potential in energy forecasting and the use of thermography for energy applications. The evaluation of market dynamics and the identification of energy usage in different industries will differentiate successful companies from the rest. All electric utilities sell the same product, a flow of moving electrons, so differentiating factors will be related to aspects such as quality customer service. In this new landscape customer data regarding electricity usage will be crucial for companies wanting to have a competitive advantage. We have the software and hardware needed to perform these tasks as our group is among the companies in Mexico investing the most in data storage devices. We also see a barrier in this sector because most Mexican companies do not have real-time metering devices. The Law of the Electricity Industry says that private investment in electricity transmission and distribution infrastructure is only allowed under certain conditions with CFE or their subsidiaries.

Q: What projects would you develop if the transmission and distribution segments were fully liberalized?

A: Distribution represents the largest business opportunities from our standpoint because there is a need to educate large electricity consumers about best energy practices. Electric utilities could offer service packages, selling electricity supply with a demand management approach. Utilities could advise customers on the most suitable times to carry out energy-intensive processes, rewarding them for following the suggested guidelines. We would also like to invest in the modernization of the power distribution network, a sector that could benefit enormously from private investment. Having more efficient grid lines would reduce technical losses, bringing economic savings to the country and avoiding power blackouts. Also, it would avoid the presence of voltage voids in the network, which can seriously damage sensitive equipment.

Q: What investments has Grupo Dragón already made in electricity transmission and distribution?

A: We have allocated US$216 million to a smart grid project. This project focuses on advanced metering devices and is one of the largest initiatives in Mexico in this area. We are working with CFE as stated by Mexican law, which says that private players must establish joint ventures with the state-owned company for transmission and distribution initiatives. We have identified a number of business opportunities to improve the Mexican electricity network and we consider advanced energy metering a suitable starting point. Efficient and accurate interpretation of energy data is one of Grupo Dragón’s strengths. We are ahead of our competitors in this area by six years.

Q: What are the advantages and challenges of being a fully Mexican company in a sector dominated by international players?

A: An increasing number of Mexican professionals gain experience working with international companies. Mexicans are exceptionally creative, which is important for engineering-related activities and is something not all nationalities share. Mexico’s young professionals are hungry for success, an aspect that companies with ambitious initiatives such as Grupo Dragón appreciate. Being a Mexican company allows us to understand the country’s idiosyncrasies, which is needed to design the best solutions according to the national context. I have mostly found advantages in employing Mexican professionals. Grupo Dragón was founded years ago and we are now a reference in the sector. We are pioneers in geothermal and smart grid development in Mexico and this success has been mainly thanks to our committed Mexican workforce.

Q: What is Grupo Dragón’s direction for the upcominhg two years?

A: The main challenge for us will be to adapt to the new market conditions. Power generation from geothermal and wind energy sources will remain our focus but we are also exploring combined-cycle power plants.