Rigoberto Castañón
General Manager
S&C Electric Mexicana
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View from the Top

Opportunity on the Horizon as CFE Transforms

Wed, 02/22/2017 - 15:47

Q: How has the company’s relationship with CFE changed since the implementation of the Energy Reform?

A: Our business relationship with CFE goes back to 1956, when we started working as a service provider for the state-owned utility. Our equipment and services enjoy a good reputation within CFE, which views us as a reliable supplier because we would rather provide added value at a reasonable price than low-cost products. Even though there are more affordable products in the market, CFE has preferred our solutions due to the extended lifetime and optimal functionality they offer, which create long- term savings. The transformation of CFE into a productive enterprise of the state has halted our business activities with this client but that is true for many CFE suppliers. Some of these companies are facing the risk of bankruptcy but S&C is financially equipped to overcome this challenging period and is prepared for the moment when business takes off again. In the meantime, we are analyzing how we will adapt our offer to fit CFE’s new role. The company is confident it will maintain a positive relationship with CFE as it strengthens its focus on productivity.

Q: How is S&C Electric Mexicana helping Mexico’s implementation of smart grid technologies?

A: Our company supplies cutting-edge technologies for smart grid development but due to the transformation that CFE is undergoing we have not realized any important projects. So far CFE has only installed smart meters to quantify the amount of energy consumed by end users but it has not yet invested in smart management of the electricity transmission and distribution networks, which we expect it to do at some point because smart technologies are needed to ensure the optimal functioning of the grid. In the case of Mexico City’s grid, which has several inflow points, a failure of one of the energy supply sources could affect the entire network. To avoid this, the operator needs to isolate the area located close to the problem while using the remaining inflow points to ensure a continuous supply. The process can take up to four hours but advanced, automated technologies can do this in minutes. Smart technologies also can pinpoint the failure’s exact location, optimizing the time needed to repair the problem. These systems collect an incredible amount of data, which can be used to analyze the overall functioning of the grid, allowing the operator to design strategies to mitigate and control potential failures. Once CFE starts upgrading its systems we expect business opportunities to open up in this area. To increase our visibility and show CFE the advantages of our products, we are now developing a number of pilot projects in different Mexican regions. These consist of small-scale distribution grids with five or six connection points where we can test our products’ performance. The tests allow us to identify potential failures in the grid and ensure our products can properly solve them. We have carried out two pilot projects in Cozumel and Tijuana over the past two years and we are now promoting a new one in Monterrey.

Q: Which of your smart grid technologies are most relevant for the Mexican market and why?

A: Our protection and sectioning devices could be particularly useful for Mexican grids. Protection technologies avoid the spreading of local failures throughout the entire network, making them an important component in preserving the grid’s infrastructure. These devices are equipped with special sensors and controllers as well as mechanical systems consisting of a safe lock that can block the circuits in case of an emergency. Protection technologies are not new but they have evolved to provide the same service automatically and in a more efficient way.

Q: What are S&C Electric Mexicana’s priority business opportunities in the short term?

A: We expect to get involved in projects related to the design and construction of renewable energy facilities. The company also is working on identifying opportunities with private market segments, such as hospitals. This is expected to compensate for the slowdown of projects resulting from CFE’s restructuring. We also expect CFE to start investing again soon.