Greater Cooperation Between Government, Private Sector NeededBy María José Goytia | Fri, 06/24/2022 - 10:31
Q: What opportunities in the Wholesale Electricity Market (WEM) incentivized you to create Sujío?
A: After founding the electrical construction company HHGM following the 2014 Energy Reform, we identified the possibility of connecting energy suppliers with their respective load centers. We soon realized we had a competitive advantage regarding electromechanical construction, which led to the foundation of Sujío in 2018. Since then, we have focused on the goal of providing energy to qualified users and self-suppliers with systems below 1MW and a service experience to the exempt generators
Q: Why did you decide to base yourselves in Mexico’s Bajio?
A: Sujío is from Guanajuato. However, our central location in Mexico allows us to cover an area with between 300 and 400 qualified users within a two-how car drive. Furthermore, we wanted to take advantage of the dynamic growth of the Bajio Region, which is quickly becoming a hotspot for the automotive industry and all those attached to it. Our base of operations also reaches San Luis Potosi and Queretaro, while the Valley of Mexico is not too far down the highway.
Q: What sets Sujío apart from its competitors?
A: Sujío may still be young but we have already garnered a great deal of experience in different fields of the energy industry. An added value is that we offer clean energy alternatives to help our clients comply with their commitments to reduce environmental pollution. We have also put an emphasis on in-house energy generation with innovative software and our new website, which allows customers to measure their energy consumption in real time. Finally, we approach clients honestly and transparently. This clarity helps us provide the best service possible.
Q: How do qualified suppliers contribute to a fair and competitive WEM?
A: The presence of multiple qualified suppliers catering to businesses that consume energy in excess of 1MW unleashes the potential of the sector as a whole. A wide range of options is important to give businesses greater choice in terms of price, the type of energy they require and the services they want. At the end of the day, more options result in higher investment and increased growth for the industry. The biggest winner from free and open competition is always the customer because it reduces tariffs and generates new opportunities and services.
Q: How has the change in the political discourse toward renewable energy affected your operations?
A: With the new reforms, many projects have been put on hold due to the uncertainty that prevails in the sector, including new energy projects, as well as supply and service contracts, among other initiatives. When the current administration failed to garner the necessary votes for a qualified majority during the midterm elections, the world began to take interest in investing in Mexico again and the interest on the wholesale electricity market grew. However, on the back of a constitutional energy reform everything has come to a halt once more. What we need are clear rules and regulations to promote development and incentivize investment across the sector. Both the government and private industry need to work together toward this goal.
Q: How has the reactivation of the Electricity Industry Law (LIE) reform presented a challenge to the commercialization of energy?
A: Until all the amparos are resolved and doubt is removed, the sector will retain its inertia. Sujío’s position is that all new legislation should be progressive and foster both a clean environment and free competition. We have lost out on business and been unable to get plans for battery storage up and running because of the lack of clarity regarding regulations and permits.
Q: What opportunities do you see in the field of distributed generation (DG) given the current market conditions?
A: We are seeing solar, small hydro and biogas projects growing in importance. This presents a great opportunity and could prove to be beneficial for all involved, reducing losses for distributors, enabling businesses to operate more sustainably and providing consumers with better quality energy. There is also great potential to follow the lead of other countries by increasing the on-site minimum generation capacity, which stands at 10MW in Texas, for example. This gives businesses more autonomy to generate their own electricity without depending on anyone else. We are betting on a DG boom in the near future and want to help our clients optimize their revenue.
Q: What opportunities do you see to improve the service and quality of the national electric system?
The issue of support and payment in the bidding process for reserve markets must be solved. There is a great opportunity with the tendering of long and medium-term contracts, but we need to approach them with an eye on social responsibility to generate inclusive and innovative development. This will democratize the electricity market so that any Mexican can access it, commercializing the industry, publishing the pending manuals such as virtual transaction or the Hour-Ahead Market and launching the auctions for to purchase transmission financial rights that go hand in hand with the services. To achieve all this, we need a regulator that keeps pace with the market, like in Europe and the US.
Q: What deficiencies are there in terms of the national grid?
A: We are constantly playing catch-up with grid code efficiency. To get big projects up and running, we need to strengthen the national grid via improved maintenance. The market has seen some success in this regard already. More isolated regions, such as Baja California Sur, have recently been able to better integrate into the national grid. What we need is more interties between systems and increased grid reliability in isolated areas. This is a job for CFE. To really maximize the potential that exists in this country, we need to think globally because Mexico has the potential to be the No. 1 supplier and exporter of electrical energy from renewable sources. This can be achieved with stronger international interconnections with Central America and the US. Making this happen will be the responsibility of both private energy companies and the government. We need to work together as a team toward this goal.
Q: What are Sujío’s plans for 2022?
A: We aim to further our projects with CFE regarding solar power and biogas in the Bajio. However, we would like to expand our portfolio to cover more sectors of renewable energy generation, as well as to encompass all areas of the country toward the north and south. This 2022 we will accomplish our goal of being the main service provider of asset management for autonomous power production through DG.
Sujío is a Mexican company founded in 2018 as a result of the 2014 Energy Reform. It is the first electric energy supplier participating in the Wholesale Electricity Market, located in El Bajío who supplies electricity entirely generated through renewable sources.