Energy Sector Sees Little Digitization Despite Increased Demand

Q: What key factors are essential to catalyze the digital transformation within the Mexican mining sector?

A: Digitization in Mexico is still in its early stages but demand is growing exponentially, especially regarding the optimization of energy resources. However, digitization goes beyond optimization; it involves quantifying the carbon footprint, which is essential due to the pressure that private companies face from ESG reporting. It is no longer sufficient to report general data, as more precise and detailed information is now required.

Digitization allows companies to track changes in behavior and identify opportunities to replace outdated equipment. Using data to establish a baseline, it is possible to make informed decisions about investments to improve efficiency. The potential for savings and process improvements through digitization is significant. When companies understand these benefits, they will shift their focus from the cost of digitizing to the cost of not doing it. The cost of digitization has also decreased due to technological efficiency and scalable telecommunications. 

Q: How can industrial clients transform their environmental footprint into commercial value?

A: One of the most effective ways to add value is to take advantage of access to cheaper capital, which is found in green funds, green bonds or green debt. These options offer lower interest rates and more cost-effective capital for projects that have a positive impact on the environment.

To access this capital, companies must effectively demonstrate the viability of a project, which requires data. Once proven, green funds can be obtained to execute initiatives that optimize processes and reduce consumption of resources, such as electricity and water.

Q: What are the biggest challenges for traceability and reporting, especially regarding emissions?

A: The energy transition encompasses different challenges, which can be ranked from levels one to three and become increasingly complex as the transition advances. To address levels one and two, which primarily refer to an organization's direct and indirect emissions, it is essential to electrify processes and then address the generation of electrical energy from renewable sources. These are significant challenges but, with proper work plans, they are achievable.

Level three, which relates to indirect emissions in the supply chain and in the use of products or services, poses even greater challenges. This level involves changing the relationship between individuals and the use of energy resources in everyday life. In the future, people will be more informed about the energy they consume, with alerts and recommendations to improve energy efficiency in homes and in their daily activities. This long-term vision entails a significant social transformation in addition to the energy transition. Technology will play a fundamental role in this transformation, enabling greater awareness and efficient energy use. The digitization of industrial processes is a step in that direction and can help mitigate challenges related to climate change and energy transition.

Q: Mexico’s energy market is quite young. What are the biggest changes you perceive in the market and how do you expect it to evolve?

A: Mexico’s legal framework has evolved significantly since 2015, laying the foundation for a more advanced energy market. Legislation has promoted distributed generation, although with some restrictions on the maximum capacity allowed for interconnected systems. This has strengthened the resilience of the electrical grid and energy assets. Although distributed generation growth is in its early stages, there have been significant advances, especially in distributed energy storage. Digitization and energy storage are experiencing considerable growth, being driven in part by the lack of growth in large-scale generation.

The electrification of vehicle fleets and electric mobility are on the rise, driving up electricity demand. These changes are stressing the electrical grid, leading to the need to improve electrical infrastructure to meet the growing demand

Q: How is S2G Energy exploring a potential expansion beyond Mexico?

A: Mexico is seeing a growing demand for more resilient and localized supply chains, which will require a significant focus on the Mexican market in the long term. Thus, we decided to focus on the local market before expanding internationally. Instead of opening a commercial office from scratch elsewhere, we are seeking opportunities through global clients already operating in Mexico. This strategy is based on leveraging the trust and relationship developed with these existing clients.

This shift in business strategy aligns with the growing importance of Mexico in the global supply chain and the need to capitalize on the opportunities this represents, especially in industries like manufacturing and the lithium supply chain. Mexico has the potential to become a digitization services hub.

S2G Energy harnesses the power of data and technology to transform the energy landscape. It specializes in two main pillars: Energy Resources Management and Optimization and Electromobility Fleet Transition.