Hans Kohlsdorf
Managing Partner
Energy to Market (E2M)
View from the Top

Look at the Future But do Not Forget the Present

Wed, 02/21/2018 - 15:10

Q: What areas should regulating authorities improve now that the energy market is up and running?

A: Their efforts have been well directed but it makes no sense to have a commodities daily transfer market that demands coverage on the transferred goods, such as capacity or CELs, for up to 18 years. For a proper market to work it is important to allow for the existence of surplus that can also be traded, not just for the creation of goods that are warranted to be part of the transactions. Another step that has to be taken is to fix the competition laws to open up opportunities in the market and make it a level playing field. In the energy market, a company having 10 or 15 percent generation capacity in a specific region is already in a strong position where its decisions may strongly influence market trading prices. In a well-developed market the price dictated by offer and demand is the correct price. The private sector asked for an Energy Reform that allowed for the development of market prices, so it makes no sense to now look for fixed tariffs that protect the investments over a long term. Contracting of coverage should be incentivized in the market to provide protection against price variation. The local financial sector has proven to be a burden for Mexican developers or new Mexican generation companies. It seems that financial institutions are asking for contracts that basically return to pre-reform conditions. It is sad that this is hampering local participation in the new electricity market but I am certain that the Mexican development banks are working on a solution to level the playing field for the Mexican private sector.

Q: What added valued does Energy to Market provide through the use of its platform?

A: E2M's experience in the automation and control business and its deep understanding of customer operations and energy efficiency provides the perfect platform to structure the best energy portfolios for its customers. The advanced software platform we use not only makes life simple for our customers when facing a complex energy market, it also provides valuable insight that helps our customers implement significant savings. E2M works with the fundamental power model that maps all the nodes in the system, includes all transmission and congestion possibilities and predicts a period of up to five years, providing as a result a very detailed forecast of the market. This makes the software much more solid, but it also requires more power and time to compute all the possibilities. Being an independent trader, similar to an insurance broker, we can help our customers find the best fit for their requirements. Vertically-integrated companies will always focus on offering their own products at the highest possible prices they can. As an independent we can help our customers save significant amounts.

Q: How does Energy to Market attract its human talent?

A: E2M follows two paths when recruiting talent. The first is the inclusion of interns who want to start developing their career and to learn from the market during their studies. This way, the moment these interns graduate they have gathered an in-depth knowledge that we can start capitalizing through our added-value activities. The second is making an effort to recruit talent with a background in either the financial sector or in the energy sector. Our teams then complement each other with their expertise and we can have a broader view of what the market needs.

Q: What are Energy to Market’s plans for Mexico?

A: We want to become a strong player in Mexico but we also want to foster competition and the presence of competing companies. If we did not want to foster competition, then we would be actually telling our clients that the best option for them is us, simply because we are present in a market where there are no other options. Competition allows us to follow a growth path driven by excellence.

Energy to Market (E2M) is an energy broker and service provider in the the Mexican electricity market. The company targets energy generators, qualified users and qualified suppliers with generation capacity.