André Bosman
Director of Service Unit Caribbean, Central America & Mexico
Wärtsilä
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View from the Top

Flexibility Key for Competitiveness

Wed, 02/22/2017 - 16:07

Q: How have the oil and gas and electricity markets changed since you entered the country in 2004?

A: We are witnessing a deep transformation in both sectors. They are now more accessible so it is easier for us to do business here. Our main focus traditionally has been the oil and gas industry, being a supplier for PEMEX, but we have also worked with independent power producers (IPPs) in the electricity sector. We are seeing a diversification of producers of base load energy as well as a more secure market where energy prices are increasingly more competitive.

Our company now has several interesting projects in the pipeline but I would like to highlight Huinala in Monterrey, a 140MW flexicycle power plant running on gas that has delivered outstanding efficiency and availability numbers. The Huinala plant started operations in the second quarter of 2016 and we are enthusiastic about the efficiency and availability levels we are getting there. It is definitely one of our flagship projects in terms of technology and successful collaboration with local staff.

Q: In which segments do you expect further growth given market conditions?

A: Power producers. There is enough demand in the market for new technologies such as the dual and tri-fuel technologies we offer. Our engines can quickly shift from one fuel to another, from heavy fuel to gas. That capability allows companies to adapt their operations to current fuel prices and to choose the cheapest option. Fuel flexibility is particularly important in this time of insecurity because the future price of fuel is uncertain in Mexico. That is one of the key added values that our technology offers, maybe our biggest advantage. Single-fuel power plants have no other option than to pay the market price, even if it is too expensive. This is the main reason why most of our clients choose the dual-fuel option.

Q: What are the main advantages of multi-fuel engines compared to traditional engines?

A: Besides engines, we also have multi-fuel turbines. The biggest advantage is having EPC capabilities to build any power plant at any location with reasonable terms and resources. As for the technology, we can attain very high efficiency and availability, which makes it cheaper and more competitive than other products in the market. The flexibility of the response time is another key factor. Many companies underestimate a technology’s capability to adapt to local circumstances but this is also crucial. Operations do not always happen at 24°C at sea level conditions and the equipment needs to be adaptable to these situations.

Q: What opportunities have you seen with the liberalization of the market and new players coming in?

A: We can now work together with our clients to develop technological solutions. The challenge in the oil and gas sector is that all companies are trying to reinvent themselves while looking ahead to prepare for the industry’s future needs. We are working with our clients to develop optimal solutions to overcome this difficult period and increase operational efficiency. This also includes developing solutions for times when production needs to be cut due to low market demand.

Q: What potential have you identified for distributed generation development in Mexico?

A: Distributed generation has huge potential in Mexico. We see a strong appetite for flexible and reliable power generation but at competitive prices in both CAPEX and OPEX. We offer several solutions that take the best aspects from solar and wind energy technologies to comply with these requirements. Mexico’s regional characteristics are helpful because factors like temperature and altitude have an enormous impact on an installation’s efficiency. The flexibility of our solutions allows companies to respond more quickly to demand changes in the system. We use integral solutions for this purpose, integrating many fast-response engines that can respond to a system’s changes in milliseconds. Flexibility is one of the key characteristics that power generators look for in new technologies.