Javier Garza
Sebastián Leal
Sebastián Leal
Vice President
View from the Top

First Entrant Soars with Energy Trading

Wed, 02/21/2018 - 12:21

Q: How is SUMEX working with the regulatory authorities to make the MEM a more attractive market?

JG: The MEM is just beginning. As the first qualified supplier actually operating in the market, our field experience is proving useful as we continuously provide feedback to the Ministry of Energy, CRE and CENACE on what we believe is working well and what should be modified or improved. The first steps have been smooth and will continue to be so in the coming years, while the market consolidates and other players such as traders, qualified suppliers and qualified users enter the market and start to operate.

Q: More suppliers will be operating in the market in 2018. How will SUMEX maintain its competitive edge?

SL: Our commercial strategy is very different from other companies. Many of the companies entering the market, such as Iberdrola, CFE Calificados and Fisterra, are primarily generators before being suppliers, which implies a different commercial strategy. These companies mainly focus on obtaining the required energy for their plants and their corporate structures are quite large compared to SUMEX, which gives us the advantage of flexibility. We are also more ambitious. Our goal is to capture the greater part of the market by adopting an aggressive posture. Other suppliers that focus solely on one client have approached us to operate for them. Similar to what happened in the US, we are anticipating a small number of companies, from five to 15, will consolidate in this new market and the remaining players will be absorbed by the main players.

Q: How did you close the San Pedro Garza Garcia municipality as a client?

SL: We worked with the authorities' Load Aggregation Agreement that rates municipal low voltage. Before that agreement was published, many municipalities did not meet the requirements to comply as qualified users, since their main consumption was low-voltage public lighting. When this agreement came into effect on Jan. 26, 2016, we were able to get involved with the qualification process for the municipalities we signed.

Q: Can you describe your partnership with solar technology companies and the strategy behind it?

SL: It is a distributed generation project that we have yet to formalize. This strategy arose from the realization that many of SUMEX’s current projects will be carried out through distributed generation. What sets us apart is our regional commercial force. Through this strategy we can cover the largest part of the market, state by state.

Q: Could you elaborate on your Trading Desk service?

JG: Our Trading Desk is the area in charge of energy trading. It allows us to access and monitor available information to conduct efficient trading operations. I believe this gives us a considerable competitive advantage. This service provides representation to qualified users and generators, supporting their permitting processes before CRE, presenting offers and bids to CENACE for the dayahead market, forecasting day-ahead and real-time prices and carrying out the relevant billing and settlements with CENACE. The Trading Desk also advises long and midterm auction participants and clients interested in financial transmission rights, as well as evaluating diverse types of coverage contracts and optimized process scheduling for energy-intensive industries to minimize costs, under a rolling horizon scheme.

Q: Where is SUMEX at the moment and what are your goals for the future?

JG: We are close to achieving 1TWh of appointed energy and we are very satisfied with that. We will continue exploring new business lines we can mature into our core business in energy supply, such as energy diagnosis and energy efficiency, the alliances we previously mentioned, solar panels installation and purchase of solar energy as well as integrating the whole value chain that will assist in reducing the electricity bill costs for private companies.

SUMEX is a Mexican company launched in August 2015. It provides qualified services regarding energy supply. SUMEX stands out as the first private company trading energy from a diversified matrix of renewable sources in Mexico