José Luis Pérez-Arenas
Managing Partner
Qenergy
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Independent Financing for a Capital-Starved Market

By Cas Biekmann | Tue, 04/06/2021 - 11:05

Q: How did the merger to create Qenergy come about?

A: The companies that make up our union, Energy Gurú and Energía Estam, met while working on a project a couple of years ago. Starting with our first meeting, it became obvious that there were many synergies that could be established and developed between us. Energy Gurú is a consultancy that I founded with Jose Pérez, while Energía Estam focuses mostly on finding opportunities to create energy efficiency. Energía Estam’s portfolio was quite formidable, and we quickly recognized how much value we could provide to those clients.

This led to the creation of our joint venture, which focuses on a 360-degree approach. We analyze our clients’ entire energy paradigm, meaning the combination of their energy input and consumption. We then build a platform for them through which we find ways to minimize their consumption through efficiency strategies, while also making their inputs more economically convenient by looking at potential energy purchasing options. Additionally, our finances allow us to fund all necessary installations for our clients in compliance with all government requirements in order to enter the new electricity market. We can also finance all additional expenses for this activity, such as the warranties that users need to set up to work with qualified suppliers. Our core business line is buying and selling energy. We are also developing a secondary business line to represent power plants. We are authorized to be a generator as a market participant in the electricity market but our main activities for now will be to commercialize rather than to become a supplier.

 

Q: Which of your services and capabilities experienced the most demand in 2020?

A: It was definitely a tough year, especially given how the Mexican energy market was influenced throughout 2020 by the news media’s coverage of the government’s modifications of the sector’s legal and regulatory framework. However, we are sure that the industry needs help from companies like ours because of the assurances we provide our clients. Our efficiency services were most in demand because companies are looking to generate savings wherever they can. The country is in the midst of a financial crisis and our sector is by no means immune to that. While we have all the permits necessary to represent power generation assets with CENACE, we have no power generation portfolio of our own, so that did not show up in our 2020 activities.

 

Q: How would you evaluate the government’s initiatives regarding a potential redesign of Mexico’s energy market?

A: It is a very delicate issue. The ultimate outcome will depend on how they implement these changes. The prioritization of CFE plants is one thing and we can deal with that initiative. However, if this prioritization is established within the merit-based dispatch order, we could be dealing with some catastrophic problems for the Mexican electricity market. We could be looking at the beginning of the end. Personally, I do not think that will happen because the government knows that the industry is experiencing losses and that it must begin compensating for these as soon as possible. The exact design of these changes will most likely respond to that need. However, all of this media noise is definitely influencing the state of the market.

Either way, the market needs to attract more liquidity, capital and capacity no matter what the laws and regulations are. This is ultimately a demand-driven market, so power-generation projects that provide the best prices need to be prioritized. This means that combined cycle natural gas power plants, wind power plants and solar power plants will need to be developed at an accelerated pace. This means an acceleration of all permitting processes. There are no politics involved in the fact that Mexico’s grid requires a lot more MW to adequately meet the needs of its increasing number of users.

Qenergy was founded by a group of entrepreneurs with experience in the energy sector. It commercializes energy and is a qualified supplier in the WEM. The company is the result of 2020’s merger between Energy Gurú and Energía Estam. s grid requires a lot more MW to adequately meet the needs of its increasing number of users.

Cas Biekmann Cas Biekmann Journalist and Industry Analyst