Francisco Con
Business Development Director
CEMEX Energía
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View from the Top

More Than an Off-Taker

Wed, 02/21/2018 - 18:13

Q: What differentiates CEMEX Energía from other project developers in the country?

A: CEMEX Energía’s case is different from almost any other project developer in Mexico. Of course, CEMEX is one of the main energy consumers in the country, and the fact that for the last 20 years we have developed projects to cover our own energy consumption has allowed us to gather a special knowledge about the market and the requirements of end users that few companies in the industry have. That can only be harnessed by being highly proactive in the sector. One of the lessons we have learned when matching possible projects with energy consumers is that there must be a full and deep understanding of the energy consumption profile and risk appetite of the consumer, and that the flexibility of such consumption is vital when deciding which technology can be used to improve this consumption and make it cost-efficient.

Q: How does CEMEX Energía personalize its services for off-takers?

A: Before thinking about implementing any kind of solution for an off-taker, we start by analyzing and understanding the way our customer consumes energy, how it operates its production facilities, what role the company plays in its value chain and its geographical presence, among others aspects. Adding all these internal factors to external elements such as future exchange rates and volatility of energy prices provides us with a bigger picture of the customer’s energy needs, and what kind of project or technology will offer the biggest benefit in the long term. After considering all these factors, we offer the customer a tailored solution.

Q: Where in the Mexican energy sector does CEMEX Energía see the biggest opportunities?

A: We are interested in developing all kinds of generation technologies, and to adapt to the needs of the market and our customers. Although we have established a strong presence in wind and solar, we are also aware of the advantages of thermal projects. CEMEX has received energy from a thermal plant for almost 13 years. We also believe that a balanced energy mix is not only important for individual companies, but for the whole country. This would ensure that Mexico remains competitive regardless of external market conditions.

Although we have followed the long-term electricity auctions with interest, we are not going to participate in the next midterm edition. This midterm auction will be focused on generators that have available capacity, which is not the case of CEMEX Energía, as we have focused on developing projects under a bilateral contract scheme. The bilateral contract scheme will remain a central aspect of our strategy.

Q: How does CEMEX Energía want to impact the Mexican electricity market?

A: We believe in the Energy Reform. We cannot stress enough how important it is to have a healthy and open electricity market for the country to remain competitive on a global scale. That is why we are pleased that the market is attracting more participants. The more participants there are, the higher the reduction of costs will be along the entire value chain. The implementation of the Energy Reform has been extremely fast, but the market remains young and some aspects have to be further developed. The development of intra-day and real-time markets will be a major milestone. For the market to be efficient, users also need access to risk-management instruments, and in this area, it is extremely important that the same market participants are proactive. In the end, it is in their best interest to do so, because with better tools, more flexible contracts and more participants, the market becomes more liquid.

Thanks to CEMEX Energía’s extensive experience operating in competitive markets like the US, Europe and Central and South America, we are in a privileged position that allows us to motivate the sector and help energy users take part in the market in a dynamic way. Ultimately, we want an electricity sector that is cleaner, more efficient and reliable, with lower costs.