Humberto Bustamante
Country Manager Mexico and LATAM
Vector Renewables
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View from the Top

Global Presence, Digital Transformation for Asset Management

By Cas Biekmann | Wed, 05/26/2021 - 12:28

Q: How has Vector Renewables’ energy value chain evolved and how important is Mexico in its portfolio?

A: Vector Renewables has been in Mexico since 2013. We were actively present during the development stage of the new wave of utility-scale photovoltaic solar power plants. Later, we supported the construction stage. Currently, our main operational services are asset management, due to changes in the private energy sector, and our construction services, helping with inspections or analysis regarding performance. As a service company, you need to be flexible regarding client demands. For development services, given the current political status in Mexico, other markets in Latin America, such as Chile, Puerto Rico and Colombia, are much more viable for us.

The company offers services related to development, engineering support, conceptual design, technical due diligence, construction monitoring and management, and integral asset management of solar and wind power plants. Despite the challenges in the sector, we are committed to Mexico and will continue to support our clients.

Vector Renewables has 10 offices around the world. Mexico is a strategic location due to the potential to cover all Latin American activities from here, as well as the time zone of this part of the world. We cover Mexico, Central America, the Caribbean and South America. Mexico offers us a strategic place from which to develop our concept. For example, we have managed solar assets in El Salvador and Chile. Vector has successfully used a similar approach in Japan.  

 

Q: What distinguishes the company in regard to asset management?

A: Our global coverage and portfolio experience are two key differentiators. We take advantage of the fact that we are a global corporation and that we are part of the renowned Italian Falck Renewables. Furthermore, Vector is releasing its own effective asset-management platform this year, called NUO. We already use internally but can be provided as a separete service for third parties if they are interested. The platform is made by asset managers for asset managers.

 

Q: Why is it important for renewable power plants to switch to a more digitalized approach for monitoring assets?

A: The advantage is clear. First, you begin with calculations and manual supervision of O&M in the plant. If you only have one or two assets and understand the procedures, this approach can detect issues and ensure proper functionality. However, the larger the portfolio grows and power plants increase in size and equipment, the more automated processes will be necessary. It becomes unfeasible to have multiple people doing the same calculations and going through the same motions. A platform can easily incorporate standard procedures and allow users to efficiently monitor every key parameter essential to the operation.

 

Q: How has demand for engineering support of battery storage development grown in recent years?

A: We have working for two years to incorporate storage design in our services. Today, it is becoming especially clear that the market is ready for storage capacity technology. At Vector, we design related projects and support them. Storage is becoming part of the standard design for a power plant, particularly for photovoltaic solar. It is merely a matter of time before clients begin requesting this as a must have option, depending on the country and the needs of the project. While we are already implementing it in other markets, unfortunately there is not much renewable development happening in Mexico.

 

Q: How has M&A activity shifted since the López Obrador administration took office?

A: Through our financial advisory service, we help clients sort out the technical elements of due diligence and review power purchase agreements (PPAs). Although I cannot go into specifics, I do know about several plans currently being evaluated for purchasing and selling of power assets. Some interested companies from abroad are planning intelligent purchases at this moment. However, other companies are trying to exit the market or reduce their risks because of the uncertainty that exists in Mexico’s energy sector. Some companies are more comfortable with risk than others. Those that want to avoid risks are trying to get out of the market, whereas those that have an appetite for opportunities and are comfortable with the associated risk are interested in entering. For this reason, we are seeing negotiations take place, although not as many as we saw two years ago when the auctions still existed and the market was more open.

 

Q: What are Vector Renewables’ plans for 2021?

A: We will continue to provide our clients with all the support they need. Rather than diminish our presence in Mexico, our goal is to develop it. In terms of our active operations, we are doing even better than last year and growing. We hope that we can translate this added experience to our work along the energy value chain, from development to asset management. Vector Renewables also aims to expand its activities in the other key markets, including Chile, Colombia and the Caribbean.

Vector Renewables is a professional services company, which focuses in asset management, engineering and technical advisory. With over 15 years of experience in the renewable energy industry, it was offices in 10 countries: Spain, Italy, France, United Kingdom, Bulgaria, Sweden, United States, Mexico, Japan and Australia. The company has a multidisciplinary team of more than 200 highly qualified professionals, which manage a portfolio of more than 3.5 GW and has more than 65 GW of experience in technical advisory services.

Cas Biekmann Cas Biekmann Journalist and Industry Analyst