Andrés Fautsch
Former Mexico Business Development Director
GCL System Integration
View from the Top

Optimizing Mexico's PV Distributed Generation

Fri, 02/01/2019 - 13:37

Q: How does GCL’s comparative advantages translate into added value for its clients?

A: GCL Power Group is China’s largest IPP. As a corporate group, our energy portfolio includes combined cycle, wind, hydroelectric, nuclear and PV, the latter taking the lion’s share. GCL Power Group is also strongly positioned in the oil and gas industry, with our largest natural gas deposit in Africa. GCL is vertically integrated and owns the largest polysilicon market share, allowing for a rigorous selection of premium materials for our products and enabling us to sell this raw material to all our competitors to manufacture their PV modules. In China, our PV portfolio is made up of nearly 6GW of solar farms installed with our products. We are solidly established across the value chain, not only as PV manufacturers but also as power producers. In the eyes of financial entities, this advantage places us as a preferred option for financing and inspires investor confidence.

Q: Why did GCL Power Group turn to Mexico for the next chapter of its global expansion?

A: In 2016, GCL Power Group was 100 percent focused on the Chinese market. The first step was opening a US office that same year, followed by Europe, India, Japan and Africa. From our standpoint, Mexico can be the launching pad to the rest of Latin America. The decision was more rooted in familiarizing ourselves with global markets rather than increasing sales, given the size of the Chinese market. India’s market is also considerable, as is the US. But the US has been subject to tariff-related issues that complicate business development there, and Latin America is poised to become one of the most attractive PV markets in the short term.
Q: What market niches in Mexico is GCL System Integration focusing on?

A: As market newcomers, our strategy is rooted in developing strategic alliances within the distributed generation market to develop a footprint in the residential, commercial and industrial markets through well-positioned local distributors. We designed a successful commercial strategy with DM Solar, which has done outstanding work in fostering GCL-brand awareness in Mexico. In DM Solar we found the ideal partner as it has a long-standing trajectory in Mexico’s PV market and a logistical advantage given its headquarters are in Guadalajara, with storage facilities in Mexico City and Monterrey. Our products are being well-received, especially when potential clients become familiarized with our brand, track record and corporate size. Based on our projections, our growth in Mexico will be rooted in the commercial and industrial sectors, especially 200-500kW industrial and self-consumption projects, given they are free of interconnection permits and are competitively sized. Our flagship project in Mexico is a PV system installation in a shopping mall in Aguascalientes, developed together with Top Energy. Private PPAs with AAA companies will remain our core focus regarding business development in Mexico for the foreseeable future.

Q: What new R&D products are you looking to showcase in Mexico?

A: At the moment, GCL System Integration is fully focused on developing battery energy storage solutions. Our primary market for such product is Australia, where we developed a similar alliance with a local distributor to showcase our energy storage solution. Our batteries are still second-generation, development-wise, so it is still on a trial run. Depending on the results, we will determine if our solution is suitable for replication in other markets. Mexico’s PV market has expressed interest in this solution but in real terms it is not yet ready, especially for the distributed generation segment.

Q: In your view, what is missing in Mexico to develop a strong PV value chain?

A: Mexico has all the links to assemble a competitive PV value chain. For Mexico’s PV sector to prosper, closer attention needs to be paid to social development and raising awareness of the benefits of renewable energy with local communities.