Austin Collins
Founder and CEO
Red Energía
rodrigo guerra
Rodrigo Guerra
Business Development Director
Red Energía
View from the Top

Knowledge, Customization among Key Differentiators

Fri, 02/01/2019 - 10:59

Q: What was the primary motivation behind the creation of Red Energía?

AC: My primary motivation was to address the demand from commercial and industrial customers in Mexico, who require more predictable electricity products. Today, companies cannot be certain that their budget for electricity products will remain stable. The Energy Reform set the table for competition among private players but it is one thing to envision the reform and picture what competition might look like, and another to have actually experienced a competitive market. Other companies might have made the commitment to move into this market but that does not mean they have developed the right products for it. 

Q: What three competitive advantages does Red Energía offer its clients?

AC: The first is our knowledge. The second is the customization of our products to clients’ needs and preferences. The third would be the ease of doing business as a result of working with trusted advisers. Mexico has a rich ecosystem of professional service companies, such as energy management companies and efficiency experts. We have had very good luck working with these channels to serve our customers. 
RG: One of our advantages is that unlike some of our competitors, we are open to working with third-party advisors and brokers, which means that we can bring together people who are structuring a product. Brokers spend significant time doing the business development part of the job and we can invest our time in developing new products. This also gives our products a special degree of flexibility and specialization that allow us to tailor them for clients. 

Q: How has the market responded to Red Energía's motto of not charging any money unless real savings are demonstrated?

RG: Red Energía charges no upfront fees to assess a client’s energy needs. As an energy supplier, Red Energía only bills the customers when they have decided on a supply product  that works for them. Most clients finance their projects through CAPEX because it is hard to find other financing sources in Mexico. We could sell to a client for a higher rate than they are paying now if they are paying for certainty over anything else. However, clients want to see savings so we generally do not bill them until they see their first electricity bill. We are providing a less expensive product at a stable price. 

Q: What strategies is Red Energía using to attract clients, both generators and off-takers?

RG: Our strategy consists of networking and visiting events. We recently visited a CFE event put together by a small group of companies in Monterrey with the aim of bringing together different lines of the energy efficiency business. At that event, we were the only party providing energy. We can partner with companies that improve energy efficiency, for instance, in the use of air conditioning, windows or motors, and companies are thrilled because we can save them money by reviewing their electricity use to determine if they are doing it efficiently. Word of mouth also attracts clients.

Q: What two main goals does the company want to achieve by the end of 2019?

AC: We are growing the company aggressively. Our main goal is to increase our investment in technology. However, it is hard to find experienced talent for this business in Mexico. We need a staff that can handle all the functional roles surrounding risk management, sales and trading. I am optimistic, however, because Mexico has a wealth of highly educated young people, so we only need to create a training program that will help employees succeed. 
RG: Another goal includes turning our customized solutions into a turnkey project to deliver a built and ready-to-use solution to certain clients. Due to the reality of the Mexican market, everything is tailored to the client; in the future, our goal will be to standardize our products. We also want to see how fast renewables can make up a decent percentage of the generation portfolio