News Article

Private-Public Sector Collaboration Crucial

Wed, 02/20/2019 - 14:39

During the Mexico Energy Forum 2019, which took place on Feb. 20 in the Sheraton Maria Isabel in Mexico City, industry experts discuss the future of the country’s transmission and distribution grid and what needs to be done to integrate smart technologies.

Mexico’s grid is poised to welcome an additional 8GW from renewable energy projects. However, this achievement will not reach its full potential without the proper infrastructure to deliver the power produced to critical consumption points. “Mexico has over 100,000km of transmission lines, of which 50 percent are over 20 years old and only 8 percent has been constructed in the last five years. There is a growth of 1 percent when the accurately demand is of 3 percent,” said Héctor Rocha, Partner for EY and Deputy Leader for the Energy Sector.

As transmission corridors continue to become saturated, Rocha explained that the shutdowns we have already experienced will continue and that we will not be able to evacuate cheap energy unless the gap is bridged. “A saturated network generates problems to the consumer. If we strengthen it, we will be able to provide cheaper prices to consumers,” said Leopoldo Rodríguez, President of AMDEE.

Alejandro Preinfalk, Vice President of Energy Management at Siemens Mexico agreed that the gap must be filled and that the only way to achieve it is by working as a team. “We must have a robust, quality and flexible system that will allow the country to flourish,” said Preinfalk. “Using smart technologies will push the digitalization of the system and provide companies with data to monitor the status of the system and carry out predictive maintenance, reducing downtime and costs.”

Cybersecurity will play a larger role as the system becomes more digitalized. “We ensure the safety of the data and it is becoming the most important asset of any device. It is a real risk, especially in the transmission network,” said Preinfalk.

There is much work to be done to supply the country’s growing demand, but the panelists agreed the government will not be able to build the necessary infrastructure alone. “The government has a natural monopoly in terms of distribution and transmission lines. In regards to transmission, it should continue to have this role but the challenge is too large and there is no way that there is a budget large enough for the government to do it alone,” said Rodríguez. “The rules of the game have changed. We have to create new schemes and even if they are not called auctions or tenders, the private sector must be involved. The private sector’s role should support, especially when it comes to the large challenge the country has in terms of generation.”

When it comes to distribution lines, Rocha stated that there are over 800,000 distribution lines in Mexico, and the number has decreased throughout the years. There are technical losses equating to 13,000GW/h and 18,000GW/h of non-technical losses, which means that over US$2 billion are lost due to these inefficiencies.

From an EPC point of view, Nuno Inácio, Director General of G3R discussed the uncertainty among players and the need for clarity. “The two main challenges are to increase the number of distribution lines and the other is to modernize, but the main focus should be how to do it together. There are players who want to be involved and invest. It needs to be well defined, so that we can see the role we will play. There are plenty of solutions. We are available, there are many EPCs like us waiting and we are hopeful the projects will continue,” said Inácio.