Energy Procurement at the Service of ConsumersFri, 12/27/2019 - 07:00
Q: What is Acclaim Energy doing differently in its approach to the C&I segments in Mexico?
MT: In Mexico, companies do not have a team in charge of executing energy transactions. This commodity is quite complex and there is limited experience at the corporate level. It also implies many risks for the consumer. Most offers from the qualified supplier side are ambiguous and place much of the risk on the end-user. Acclaim Energy adds this value, as we sit down with the generator or the qualified supplier and develop this conversation with a same level of knowledge and expertise. In this sense, the energy consumer has a support team that will guide them through the energy procurement and management process.
DM: Acclaim Energy offers a strategic energy management approach. Unlike other companies that deliver a brokerage service, we focus on each client by managing one of the most significant expenses that companies have. Energy is one of the top five expenses in the manufacturing, steel and automotive industries. The company has a team of 50 professionals working with over 500 clients while managing more than US$2.5 billion in energy expenses per year.
Q: What factors come into play when implementing a risk management strategy for energy?
DM: There are three main elements to implementing energy efficiency measures. The question is, in which order are you going to implement these strategies? A company should purchase low-cost machinery, but it also needs to adjust its consumption profile to the behavior of energy prices. This changes throughout the day and the idea is that the company does not consume energy during peak hours. If its production process is flexible enough, this measure needs to be implemented. Additionally, increased efficiency in the production plant could be reached by changing lighting systems, refrigerators or engines. Almost every element that consumes electricity is subject to change. The implementation order of these strategies depends on which segment demands the greater investment. Today, more monetary value comes from the energy procurement side, but it is all linked together. By analyzing energy data, the end-user will start to ask how the production plant is operating and what changes are needed to reduce energy use together with the implementation of a supply procurement strategy. If you can save money while investing a minimum amount of money with the support of a consultant, this first step will finance the rest of the energy efficiency strategy.
Q: What are the differences between the Mexican and the US corporate markets and how are you adapting to Mexican clients?
MT: When a company reaches a certain size, a change in energy strategy becomes necessary. This is the case in Mexico. In the US, Acclaim Energy has achieved energy savings of 25 percent. In Mexico, this figure has increased to 40 percent. In terms of data management, energy markets in the US are more advanced than in Mexico. We are preparing our clients in Mexico to embrace Big Data and to analyze their energy consumption using measuring devices, which means they will need the devices to get the information but need interpreters to understand it. With more available data, we will be able to measure seasonality and have a stronger visibility regarding their operations. We correlate this information with the market alternatives and structure a strategy to match the consumption profile and the risk profile of each client. If our clients do not have this information, then we analyze historical data from CFE’s invoices. Eventually, every company will have this data and we will be able to manage it since there is a hidden value not only in the optimization of energy supply, but also in optimization of internal operations. There are always additional savings that can be found there.
Q: How do you foresee the evolution of the corporate purchase segment in the coming years?
DM: From a macroeconomic perspective, the Mexican energy market continues to liberalize. This was mostly driven by legal and regulatory frameworks, but eventually it should be reflected in reality. One factor that impacts this transition is the price that CFE Suministrador de Servicios Básicos offers to its users. When the national utility reduced its prices, it fostered an environment in which companies felt little urgency to change their energy supply strategy. Electricity prices spiked for months and now they have stagnated. Today, many companies are dealing with prices that are 70-80 percent higher and this reality underlines the need for alternatives.
Acclaim Energy is an independent client advocate helping businesses across the US, Canada and Mexico minimize total energy costs and unlock value through an integrated energy management approach. The company reduces its clients’ total energy costs by 10-40 percent through customized solutions.