Mexico Is Undergoing Its Own Energy Transition: GE Vernova

Q: What role does GE Vernova’s Grid Solutions business play in the development and modernization of Mexico’s electrical infrastructure?

A: As of April 2024, GE has undergone a significant transformation. The conglomerate, which included healthcare, aviation, and energy businesses, has been transformed into independent companies. All energy businesses, ranging from wind and conventional (gas, hydro, nuclear and steam) turbines to grid solutions, solar and storage have become GE Vernova. The launch has been extremely successful, as we are in a favorable moment for the energy industry, not only in Mexico, but throughout the world. GE Vernova facilitates the energy transition as it has the largest installed base of conventional turbines in the world, as well as it has a comprehensive portfolio of equipment and services to electrify and, at the same time, decarbonize. With an installed base of more than 7,000 gas turbines, the largest in the world, approximately 57,000 wind turbines, and state-of-the-art electrification technology, GE Vernova helps generate approximately 25% of the world's electricity, on which many of the world's leading utilities, developers, governments, and large industrial electricity users depend. Our Power, Wind and Electrification segments provide essential products and services to the electric power industry as we work to meet the growing energy demands of economies and deliver electricity that is vital to health, safety, security and improved quality of life.

There is no single solution for the energy transition. Mexico is in a privileged position with its natural resources, proximity to the United States, industrial growth, and has among the least expensive natural gas in the world. It is not possible to simply say goodbye to natural gas and become 100% renewable. With such accessible natural gas, Mexico has many alternatives to achieve the energy transition in a clean and orderly manner. It is an excellent moment for GE Vernova and any manufacturer, technologist, or developer in the electrical industry, because the energy transition is already here.

Q:  What role does Mexico play in GE Vernova’s global strategy?

A: We have around 1,700 employees in Mexico nowadays working in several of our business units. The country is relevant to GE Vernova not only because of the necessary investments in transmission, but also because of industrial growth, influenced by the scenario in the United States and by global market trends. Many investments are coming to Mexico in sectors such as automotive, data centers, and manufacturing. Industrial parks are also growing, which represents an opportunity for everyone.

Q: What challenges have arisen as energy demand continues to increase?

A: We see a great opportunity in Mexico. It is a growing market that requires reliable, secure, and cyber-secure technology. The challenge is that every sector in Mexico competes to connect to the same substations or interconnection . There is no interconnection available, which affects some economic viability of projects. If the nearest substation is a long distance away, a connection line will need to be built, which involves a significant investment. When it comes to investments that drive industrial growth and propel greater electrical integration, Mexico has the advantage of being close to the United States, but should not rely solely on this advantage.

Q: What new technologies is GE Vernova introducing to the country and how has Mexico received them?

A: GE Vernova is developing technology for storage, grids reliability, compensation systems and more. Our core is constant innovation, especially after the GE Vernova spin-off. We will continue investing in technology for energy and electrical grids. The market requires technology that is much more complex, advanced, and flexible, which allows maintaining voltage and frequency, prolonging the life of existing lines and reducing congestion.

All this technology is applicable and necessary in Mexico, but it is more complex. In addition, this technology is in high demand in the European Union and the United States, so delivery times in Mexico and in the world are longer. Much more planning is also needed, since it is necessary to project how demand will evolve in the coming years, which implies carrying out detailed studies, as well as an investment plan considering supply chain timing. 

Q: What are your expectations for regulatory developments during the next administration?

A: The need to expand and modernize the grid and powerplants has been recognized. The crucial question is how this investment will be made given the limited budget. Budget-wise, there are challenges, but this may present an excellent opportunity to begin working on public-private partnerships to develop these projects, which has been already confirmed. Mexico cannot afford to miss the opportunity for nearshoring. Fortunately, it seems that there’s a bigger understanding that this is an opportunity that must be seized.

An important mission of regulation is to prioritize quality, normalization and specification compliance, so the technology and investments done grant the best in the industry, with highest quality, experience working in Mexico and its utilities complying with its complex specification and normalization. Also prioritize commercial trade agreements to boost competitiveness and promote employment creation and investment to Mexico

Q: What are GE Vernova’s strategic objectives and plans for Mexico in 2024 and 2025?

A: We continue to bet decisively on Mexico. It is one of our most important markets in Latin America in the grid sector and conventional power generation, as it has the largest installed base of turbines in the region. Mexico is also extremely strategic for us in the nuclear area. Additionally, we continue to operate and invest in our GE Vernova’s Queretaro Technology Center located in Mexico. In this center we have engineers who are providing product support for the power generation segment in terms of maintenance, planned and unplanned, as well as improvements and retrofits. Finally, last year GE Vernova inaugurated its first Power Transmission Services unit in Latin America, in Toluca, as part of a global initiative aiming to increase local autonomy.

GE Vernova, an independent company maintains the global reach and scale necessary to lead the energy transition to an electrified and decarbonized future. In Latin America, with approximately 6,600 employees operating throughout the region, we serve our customers daily, providing solutions to help create a more reliable and sustainable electrical power system.