Severo López Mestre Arana
Director of Mexenergy and Founding Partner
SUMe
/
Insight

Private Sector Shows the Way in Sustainability Standards

Wed, 02/19/2014 - 11:10

A group of professionals from different backgrounds came together to create Mexenergy as they felt the renewable energy sector needed a push since the public sector was not acting fast enough. “We took our chances and assembled a team of talented people to start developing impressive photovoltaic projects,” says Severo López Mestre Arana, Director of Mexenergy and Founding Partner of SUMe. The company has always showed a preference for urban areas, which it believes to be crucial for the development of renewable energy. The market has grown exponentially, but some deficiencies that have been hampering the development of solar power since Mexenergy’s earliest days have not improved. Projects often do not follow through due to financial reasons, which López attributes to shortcomings in the Mexican regulatory design. “For example, even though Aura Solar I might be the largest solar project in Mexico, it is not even connected to the national grid,” López Mestre Arana points out.

López Mestre Arana believes that it is essential to help government officials see the big picture regarding the solar industry. Mexenergy cooperates with other companies and associations to help create standards that currently have voluntary norm status (NMX) and López Mestre Arana will work with SUMe on creating binding norms. “The key to success in an increasingly overcrowded market is having the right technology and knowing how to operate it. The latter is rather complex, as it involves understanding distribution, transmission, rating systems, and regulations. Mexenergy has an advantage in these fields because using exclusively cutting-edge equipment has been a priority since the company’s beginning,” says López Mestre Arana. “When we started, the vast majority of the market was taken up by low quality equipment and Mexenergy set standards. We are interested in developing projects and, in doing so we bring the best equipment to the table.” He warns that distributors can get away with selling low quality products in a market where not all people are well-informed.

“Equipment should not be only judged based on its quality but also in terms of its adaptability when developing green cities in Mexico. We traveled around the world, tested different types of equipment, learned about standards, and even got involved with the National Renewable Energy Laboratory in the US,” explains López Mestre Arana. His company has strong ties to the US Green Building Council and both entities are working on adapting a LEED based rating system to Mexico. “We want city regulations to evolve and become aligned with the LEED certification requirements,” says López Mestre Arana. “LEED awards require a significant percentage of renewable energy generation for certified buildings but Mexican regulation does not recognize LEED standards. Players should not have to wait for the government on this. The market is asking for high quality renewable energy solutions because contractors want LEED certificates. We want to ensure this happens in many more projects nationwide,” says López Mestre Arana. Renewable energy use, including photovoltaic power, is policy driven, which means companies like Mexenergy have to ensure everything is in order for projects to go through. “The residential sector has been considering PV energy as an alternative to the rising costs of electricity, which stem from the lack of natural gas and infrastructure. However, the residential sector is not very profitable at the moment as its commercially viable segment represents no more than 100,000 households in Mexico City,” according to López Mestre Arana. “Homes that are not paying CFE’s DAC rate are paying a subsidized rate and I do not know of a single place on Earth where PV systems can compete with subsidized conventional electric rates.” Usually, the PV sector asks for incentives. This is not the case in Mexico, where PV players are asking for a level playing field where subsidies on hydrocarbons do not impact electricity rates negatively. López Mestre Arana claims this situation has been holding the PV sector back.

“The residential market is experiencing a sustained growth, providing future opportunities,. while the commercial and industrial markets require major changes in regulations and policies,” says López Mestre Arana. “Mexenergy has been forced to put way too many projects on hold due to uncertainty regarding financial returns. LEED certifications sometimes mitigate the negative effects of the insufficient regulation. It makes sense for Mexenergy to continue working on industrial certifications for the Mexican market.”