Ramón Moreno
Mitsui Power Americas
View from the Top

Knowledge, Experience Key Value Adds in Mexico

Tue, 03/10/2020 - 15:37

Q: What led to the creation of Mitsui Power Americas?

A: Mitsui Power Americas is a subsidiary of Mitsui & Co., Ltd., a matrix for stock trading capitalization that operates in nearly every sector. Mitsui acquired five plants in Mexico and decided to create Mitsui Power Americas to manage its assets and to develop projects. The company now generates the knowledge that enables better investments and the ability to provide other services in the sector in Mexico. Mitsui Power Americas provides the channel for investment attraction. We operate in Mexico in collaboration with other Mitsui-owned companies. There is a high probability that our presence in Latin America will grow, but our current target is set on Mexico.

Q: What services does Mitsui Power Americas offer that differentiate it from other players in the market?

A: The main goal of the company has been managing its own assets, but we are now also working in the management of third-party assets. We believe we can add value to the sector in Mexico with technical, human capital and operational knowledge. We are shifting to asset management in the solar sector, a field that allows us to apply our technical background. There is also synergy with large operations in the country because high volumes provide efficiency for this kind of projects. We were among the first private companies to participate in the Mexican market and we have the knowledge about the wholesale electric market transactions. We are also in the process to create a qualified supplier with the experience representing assets and load centers. While this would not have a considerable impact on our daily operations, it would create the need to develop a greater commercial presence.

Q: What advantages can you provide as a qualified supplier?

A: Everything will be managed from Mexico in collaboration with Mitsui in Japan. We have two big advantages, both on the commercial side and in finding clients. Mitsui’s financial support allows us to be a qualified supplier. This in turn, allows projects to function as power generation off-takers. We already have a well-established presence and many assets in Mexico, granting us the possibility to offer value propositions. This is not something all qualified suppliers can provide. We are penetrating this business with long-term value propositions rather than trying to earn money in the short term.

Q: What challenges has Mitsui Power Americas encountered when operating and providing maintenance to combined cycles?

A: The combined cycles market can be addressed from many perspectives on a management level. The most difficult aspect relates to human capital – finding talent, developing it and retaining it. The private sector’s participation in electric generation dates back to 2000. At that time, recruiting was based on covering job openings for station management. Most of CFE’s employees stayed in their company and the availability of new talent was limited. Our industry is still characterized by a highly-competitive atmosphere for resources and talent. This represents a challenge for many companies. One of our solutions has been partnering with universities. We need to train a lot of people for combined cycles. To do this, we have a department equipped with simulators and a designed methodology.

Q: How do you balance managing your current assets with future development plans?

A: Mitsui is already well-positioned and may eventually need to diversify its portfolio. We are now targeting solar, with one project under construction, and cogeneration. We understand that the world is progressively demanding cleaner energies. To satisfy this demand we will probably develop storage projects where we could apply our comprehensive knowledge. Despite not having a strategic alliance with any company, we are looking for reliable partners to work on individual projects.

Q: What objectives would Mitsui Power Americas like to achieve this year?

A: We are developing the technological platform that will allow us to carry out all our activities. We are also looking for new clients and alliances to do business in asset management. Despite not having an aggressive branding strategy, we are well-known in the industry and have done a lot of work analyzing possible bids for qualified supply. The development of projects is open for opportunities but we believe that we can be competitive in solar and cogeneration. Our company does not have the ambition of being the largest qualified supplier in the market. Our goal is to add value for the client while being sustainable in the long term to become a reference regarding product quality.

Q: What impact is the changing regulatory environment having on your operations?

A: We plan to stay in Mexico for the long-term and plan to work in compliance with the new regulations. Nothing communicated by CFE has been irrational and we understand where we are headed. Mexico has been an example of previous investment being respected despite regulatory changes and reforms. We will provide our advice and opinion if requested. However, we are not a company that attempts to influence national energy policy.

MITSUI Power Americas works to consolidate the energy industry to foster regional economic development. The company is the second-largest private operator in electric power generation, network and information resources.