Dr. Raúl Talán Ramìrez
Director General
FIDE
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View from the Top

Exploring the Historical Energy Efficiency Trust Fund

Wed, 02/24/2016 - 14:05

Q: How have the priorities of FIDE evolved in order to continue its contribution to sustainable development in the country and consolidate the energy transition strategy?

A: FIDE was created in 1990, during a time when the themes of energy efficiency were beginning to be taken more seriously. A national program of energy efficiency was integrated into the national development strategy at the time. In the space of less than a year, several institutions were created consecutively, such as CONAE, which later became CONUEE. In essence FIDE is a private trust fund that follows public policy in regards to energy efficiency and it is born out of a collaboration agreement between CFE and major organizations like CONCAMIN, CANACINTRA, CMIC, CANAME, CNEC, and SUTERM. All these entities established a voluntary quota, which became the seed capital that boosted FIDE. A technical committee is established where the fiduciary, which is NAFINSA, delegates responsibilities for its management. We were the first institution to tackle the existing barriers in energy efficiency in the electricity industry. Some of these obstacles included lack of norms, incentives, consciousness, and financial institutes interested in venturing into those fields.

Q: What initiatives has FIDE put forth to encourage the application of energy efficiency practices?

A: For the past 20 years we have created educational material and carried out workshops across Mexico to promote the value of energy efficiency to younger generations. In addition, we work on training the personnel that install energy efficiency equipment, and this will strengthen the human capital in the sector. In the early stages we offered free support for some projects across a wide array of industries, and these were documented as success stories and distributed across the chambers as references. We then adopted a scheme similar to ESCO where we financed projects with soft interest rates. So far we have financed 5,500 projects for SMEs and municipalities. One of the factors we look at when financing a project is the ROI, and the maximum we can reach is four years. In the case of PV projects, we have extended ROI to reflect the novelty of the technology.

Q: What steps are you taking to create consciousness of the benefits of energy efficiency and the available funds in the private sector?

A: Through EcoCredit we have been able to support SMEs that belong in the second and third electricity tariffs. This program was created thanks to Ministry of Energy, Ministry of Economy, NAFINSA, and CFE. The credits are tailored to the needs of smaller players and help them adapt to more efficient energy practices. In the past we used to work with municipalities in regards to public lighting and water administration, and other entities have similar projects such as FOTEASE, the Treasury, Banobras, and SEMARNAT. When working with municipalities, it is important to evaluate the projects because sometimes it is difficult to charge them. In many cases municipalities do not know that these funds are available, so it is important to highlight them.

Q: What are the most important technological trends that will drive the energy efficiency markets?

A: There is an inextricable link between environmental impacts and the energy industry. Today energy security is a matter that is being discussed not only in Mexico but in other important markets across the globe, such as Europe and the US. We are migrating into other schemes and FIDE is now focusing on medium-scale projects, moving from the substitution of equipment to the retrofit and modernization of production lines. Projects are becoming more complex and integrated, and we see opportunities in new sectors such as industrial parks. Distributed power generation is a current issue and we are financing several PV projects across commercial and residential segments, having funded 500 projects in the last two years with extra support from FOTEASE. We are also venturing into the cogeneration sector with medium-scale projects and so far we have carried out six projects in hotels and manufacturing sites. In order to successfully venture into these new schemes, FIDE is creating the necessary technical capacity and acquiring the most experienced human capital. We also work with CFE to develop some of the expertise and we plan to collaborate with CRE and CENACE to gauge the opportunities and help new players connect their projects to the grid.