Geographic Diversification Leads to SuccessWed, 02/24/2016 - 18:15
Wind players are pulling out all the stops to win more market share in this vast energy industry, and business and investment strategies are undergoing a massive restructure. The wind sector is poised to be the preponderant leader in the renewables sector and is emerging as a frontrunner, with investment announcements reaching US$14 billion. Few companies have been part of the backbone of the wind industry to the same extent as SOWITEC, with projects still holding prestige as success stories years after their completion. Alejandro Robles, Managing Director of SOWITEC, intends to reaffirm this hard-earned reputation by reviving its pioneering spirit, “Companies are leaving Oaxaca and we were pioneers in searching for new opportunities for development in different states. In fact, we have found states that generate even more profit than Oaxaca.” Geographical diversification is a business strategy that will enable the company to successfully branch out into unknown regions and thrive.
For Robles, the narrative surrounding the Energy Reform remains unchanged, with promises, expectations, and uncertainties still in the mix. “Envisioning a new business model is complicated because there are factors yet to be defined. In the past, we were accustomed to developing projects under the self-supply scheme and we were aware of all the rules and mechanisms. This is no longer the case, so we have to familiarize ourselves with new ways of doing business.” While these uncertainties have limited the development of certain projects, it is important to highlight the benefits, especially the impact of a growing infrastructure on wind farms. Robles is keen to point out that the grid will be expanded in three main ways. The first will be in accordance with governmental decisions that take into account the development of the territory, equality of conditions, and required increasing capacity in certain parts of the grid. The second will be through private companies wishing to develop a project and willing to pay for the reinforcement themselves. Lastly, CENACE will distinguish the areas with the highest potential and expand the grid. Thankfully, the information of the grid will be made public and this will allow players to evaluate the optimal size of projects and their prospective location.
For SOWITEC, it is not enough to have wind resources; a company also needs interconnection, strong engineering and technical and economic factors in place in order to have a bankable project. Prior to taking the plunge, SOWITEC seriously considers social aspects, with Robles explaining, “We have worked with the Equator Principles for some time. These principles are a risk management framework adopted by institutions in order to determine, assess, and manage environmental and social risks in projects.”
If a project was to take pride of place in SOWITEC’s product portfolio, it would be Dominica Energía Limpia, a 200MW project, with 100MW having entered into operation, while the remaining half is being built. SOWITEC’S pipeline reaches 5,000MW, a significant figure that places the company as a leader in the sector. “We are developing 800MW for our client Enel. We also sold 600MW to Grupo Santander, and we have 350MW in advanced stages,” Robles describes. “Additionally, we have over 3,000MW in different development stages, including 1,500MW in the wind measurement stage and 500MW in the six-month development phase,” he adds.
Oaxaca has earned its title as the mecca for wind developers, yet the north of Mexico is beginning to garner attention as an area rife with potential. Most of the projects SOWITEC is developing are located in the north, and in order to find a bankable project, the site must be close to large substations, making it easier for the company to use technologies for low wind resources. When deciding to develop a project, environmental responsibility is a crucial aspect the company considers. To succeed in the wind sector, perseverance is needed during the gathering of evidence and research, and it is during this process that SOWITEC identified the vast differences between regions. In the north of the country land ownership is vastly different; acres upon acres of land can belong to just one owner, while in Oaxaca a company may encounter a hundred owners on the same piece of land. SOWITEC is not afraid to venture outside the comfort zone in search of new wind resources. ”