Efficient O&M Saves Costs and the EnvironmentBy Cas Biekmann | Tue, 11/03/2020 - 15:21
Q: What is the history of Veolus in Mexico and what sets it apart from its competition?
A: Veolus is a 100 percent Mexican company. We mainly focus on operation and maintenance (O&M) of technical infrastructure, such as combined heat and power (CHP) engines, air conditioning, escalators, generators, power plants, lighting, substations, fire protection networks and, of course, energy efficiency. We provide all of these services across the country and have more than 20,000 pieces of equipment under maintenance, as well as over 2.5 million square meters in operation. In 2001, Veolus started business in Mexico as an affiliate of Dalkia, which today is part of power producing giant EDF. The company was the result of a co-investment with EDF and Veolia, a leading sustainable utility. In 2014, the two companies decided to exit several countries, including Mexico. From that point onward, Veolus became a fully Mexican company, providing its world-class quality services to the local market.
What sets the company apart from the competition is the close relationship it has with its clients. We believe in focusing on operational excellence, as well as a sense of urgency to respond in a timely manner to our customers’ needs. Equipment can fail or be damaged if it is not correctly used. That is why it is important for us to provide O&M services by applying technical infrastructure because it is considered the basis of energy efficiency. Equipment that is not well-maintained consumes more energy, making energy saving measures futile without proper O&M. Veolus has over 750 employees who share the same principles: sense of urgency, high quality of service, transparency, honesty and innovation. I believe these principles have been key to our successful collaboration with customers for the past 15 years. Veolus participates in all industrial sectors and economic activities in the country. We are present in the retail, health, logistics, education, telecommunications, manufacturing, tourism and public sectors.
Veolus offers services through a variety of schemes. For smaller companies, it could be less feasible to have our staff on site, which we often provide. Instead, we program groups of engineers who travel and provide regular maintenance. We always offer tailored solutions to our clients because every facility is different. Since Veolus does not manufacture its own equipment and has no exclusivity, it is able to work with all brands when it comes to equipment.
Q: What are the main services Veolus can offer Mexico?
A: Veolus focuses on three main business lines, starting with energy efficiency. We help our customers save money via electric or thermal energy. We provide solutions beginning from the earliest stages, which include engineering, procurement of equipment, installation, commissioning and O&M in order to guarantee savings. These measures can be implemented either through customer investment or through an investment scheme that we arrange, since we are one of the two Mexican Energy Services Companies (ESCOs) selected by the Inter-American Development Bank (IDB) to participate in their program.
The company also generates energy. For example, we have been providing O&M for the aerospace sector. We installed CHP to provide energy and we were in charge of O&M for seven and a half years. When the contract came due, we offered our customer the right to acquire back the CHP installation so that we could sell the energy to them at a cheaper price than Mexico’s main energy supplier.
Veolus just signed contracts involving four CHP engines in the pharmaceutical industry. We will arrange the engineering, procurement, installation, commissioning and finally O&M. Veolus also installs photovoltaic panels. Our goal is to decrease a client’s CO2 emissions. We, therefore, aim to generate heat and energy with options that are both cheaper and cleaner. In the energy generation segment, we are able to provide financing through our partners as well. Our customers do not need to invest in what is not a core business. We sell and install equipment and look forward to operating and maintaining it afterward. We also look to see where we can further improve energy efficiency after the equipment is installed.
Another business segment Veolus specializes in is O&M for infrastructure. Providing suitable maintenance is a priority for us. For instance, if you do not treat the water running through the air conditioning system, minerals in the systems will crystalize. Without proper maintenance, the equipment will struggle to produce the results needed and will consume more energy.
Q: Could you tell us more about the specific solution you are going to implement for the pharmaceutical industry?
A: The solution is for Grupo Neolpharma, a 100% Mexican company that has pharmaceutical laboratories that produce high quality medicines. They continued its process of implementing environmental sustainability policies by partnering with Veolus.
With this project, 8,000 CELs will be generated in four of Neolpharma’s plants. It will save CO2 emissions equivalent to the burning of 72,471 tons of coal, or the electricity consumed by 24,549 households for a year. This is equal to planting 2.4 million trees and their CO2 absorption for a 10-year period as well.
To achieve these savings, Neolpharma will invest more than US$9 million in equipment, which Veolus will acquire, install and commission. This will create 250 new jobs, where 68 percent will be national. After construction, during the O&M stage, 70 jobs will be created of which almost all are local.
We are thankful to Grupo Neolpharma for having trusted us with such an important project. We look forward to create positive environmental and social impact in the communities in which we participate. We do this through energy efficiency and cleaner energy production projects, in order to actively contribute in decreasing CO2 emissions to the atmosphere and combat global warming. This leaves future generations a better and cleaner environment.
Q: How does Veolus use complementary services to further promote safe and efficient working conditions?
A: Veolus also has a technical monitoring segment to measure energy consumption through a specialized platform we developed in the past five years. The company can work with IoT to predict when equipment will experience a failure. A disadvantage with traditional maintenance is that after the equipment has been inspected and some measurements taken, it could fail as soon as you left the facility. With our solution, however, the equipment sends an automatic signal when something is wrong so that we can respond quickly and fix the issue.
During the pandemic we decided that it was a good idea to add sanitization and disinfection to our portfolio. This happens via nebulization of chemicals that are not harmful to humans, animals, textiles or machinery. The company has invested in this area because the COVID-19 pandemic created this specific demand among our customers.
Q: What does Veolus consider to be a major success story in regard to its energy efficiency solutions?
A: Veolus has a strong presence in Mexico’s retail segment. The main retailer in the country is one of our clients. To date, we have implemented six energy projects for this client. This implementation has saved them around US$1.6 million. In energy efficiency projects financed by the IDB via Veolus, the company shares these savings with the client. The and some of these savings go toward paying off the investment. Rather than just cash, the energy saved is significant: as of March 2020, we had saved up to 9,000,000Kw/h, the equivalent of almost 7 tons of CO2, or the energy consumption of 1,049 houses in one year. If this energy had been generated via gas, it would have taken 21,630 barrels. This is a good example of how Veolus does not only work to make a sound financial business case, but also adds to a more sustainable environment by avoiding emissions.
Another success story is a new project we are working on. This is a four-year project with a pharmaceutical company. In the next 20 years, the project will save US$31.2 million. We expect to save the equivalent of 27 million KW/h, or 145,000 tons of CO2. That equates to the energy consumption of 16,000 houses per year and saves the burning of 335,000 barrels of gasoline.
Q: What growth lies ahead for Veolus?
A: We are still growing in the O&M area. However, if the customer does not realize the importance of maintenance regarding its effect on energy consumption, O&M will remain a commodity. This means low margins and a great deal of competition. Some clients want to save money on O&M but end up spending large amounts on energy costs. Therefore, we believe that our future lies in providing these services for clients who know how important O&M is in terms of energy cost savings. Related to this, Veolus is forecasting significant growth in the energy efficiency area as companies look to save costs and lower their carbon footprint.
Veolus was founded by notable international players but has been a fully Mexican company since 2014, specializing in optimizing energy consumption, cogeneration, maintenance and sanitation for industrial players.