Energy’s O&M Leader Sees Opportunities Despite Challenges

Q: What are the main characteristics of Ingeteam and what solutions does it provide to the Mexican market?

A: Ingeteam started business in Mexico in 1998. We have a technical group specialized in power electronics, electric motors and generators, control systems and pumps. In Mexico, we mainly provide services for operation and maintenance (O&M) and we are market leaders in this segment. We also supply PV inverters, control and protection systems to the renewable energy and electricity markets. We have seen a significant boom in business with the development of renewable energies in recent years, but we have a much longer stemming and wider presence in the market.

One of the main characteristics of Ingeteam is its involvement in the area of innovation. We dedicate around 5 percent of the group’s income to R&D to continuously improve our equipment or offer better alternatives tailored to the specific needs of the client.

Q: How important is Mexico in the company’s international portfolio?

A: Mexico is one of our biggest market and represents a significant percentage of Ingeteam’s global portfolio for both sales volume and staff. We have 4000 employees worldwide and almost 450 employees in Mexico. As for the market’s potential, although we are concerned about the development of new energy projects, the O&M area involves long-term contracts and recurring activity, which provides stability in regard to our work in Mexico until more renewable projects materialize or other opportunities arise.

Q: What solutions or products are most popular for Ingeteam’s Mexican team?

A: Our equipment and services are in high demand in Mexico. To an extent, we see O&M as a complementary service to supplying our equipment. Given our experience and our office in Oaxaca, we are able to supply O&M services or take on specific jobs that clients ask for frequently. The sale of our PV inverters is generally tied to the project development. The systems for control and protection are dependent on this to an extent, although we are introducing them into CFE’s market segment. This is a door we have opened in 2020 and it is yielding a decent volume of sales. We are also working on bids to reinforce transmission lines in the country for tenders in the transmission and distribution areas. Regarding O&M, our clients are constantly looking to increase their value proposition and become stable power producers in the country. We are able to adapt ourselves to their needs in this regard as well.  In addition, it is remarkable the amount of hydraulic pumps spread in Mexico manufactured by Indar, Ingeteam Group.

Q: What is Ingeteam’s vision regarding the potential effects of the government´s restructuring of the energy sector?

A: Last year, we were already perceiving a halt in opportunities that we could identify in the renewable energy environment. With the measures that CENACE and SENER have taken this year, many projects that were close to development have now been paused or canceled definitively. From our point of view, the measures that SENER has taken have not been helpful. The image of the Mexican energy market for investors has been somewhat damaged. Mexico’s regulatory framework is not the most attractive anymore. Instead, companies are looking at other Latin American for long-term investment stability.

Q: In regard to strengthening Mexico’s struggling transmission and distribution system, what could be a valid solution for this issue?

A: One solution is to leave it in the hands of private companies via tenders for transmission lines. Other countries such as Chile have executed this model successfully. However, this goes somewhat against Mexico’s current vision of the energy sector, as well as the constitution, which states that the network should be in hands of the state. This complicates a potential tender. Regardless of how it might finance an overhaul of the system, I think the government could benefit from spending on improving the system and developing projects regarding transmission lines, as well as building further power producing plants in different parts of the country. Perhaps it could boost competitiveness in this regard through concessions. The government seems to be keen to have such projects under its control. It is, therefore, somewhat difficult to find the resources to invest in these necessary projects.

Q: What are the biggest challenges Ingeteam has identified in O&M in Mexico?

A: One of the biggest challenges Mexico faces in the area of O&M is the difference in geography. In countries like Spain, geography differs much less because it is a smaller country. In Mexico, different areas represent significant differences in geography. There are cultural differences as well. In this regard, Mexico presents very different challenges depending on the region. Due to our international experience, we can bring know-how to Mexico and adapt faster to situations. The company can also provide Mexican clients best practices that have been applied successfully in more than 20 countries.

Q: What are Ingeteam’s projections for 2020 regarding its business in Mexico?

A: On a global level, we will continue to execute the strategic plan we established in 2019, where the Group is aligning its strategic objectives with those of the Agenda 2030 Sustainable Development Goals, setting triple sustainability (social, economic and environmental) as the strategic goal. We will also try to consolidate our line of growth trying to achieve the objective established on our strategic plan of double-digit growth in sales of our different businesses Opportunities, regardless of the pandemic, will continue to exist. In Mexico, we would like to maintain our O&M market share or grow it even further. We already provide services for around 3.5GW for wind energy and 1GW for solar in this regard. We also want to collaborate more with CFE through its tenders for transmission and distribution by supplying control and protection systems. Regarding our PV inverters, this year, we have been busy with the Cuyoaco solar project for Iberdrola. It would be ideal for us if the private sector would continue the positive development it has had in the past, so that we could participate in their projects. Unfortunately, the situation is somewhat complicated. Nonetheless, our goal is to consolidate our position in the market.

Ingeteam is a Spanish company that specializes in power and control electronics, such as inverters, frequency converters and controllers, including generators, motors and pumps, electric engineering and automation projects.