Alden Kitson
Director General
Cuestamoras Energía
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View from the Top

Providing a 360-Degree View of the Market

Mon, 02/25/2019 - 17:40

Q: Why should qualified users rely on Cuestamoras Energía to meet their energy consumption needs?
A: Cuestamoras Energía is a company with over a 100-year history, primarily in retail. It is a Costa Rica-based company, with regional operations throughout Central America. Our retail orientation drove us to focus on qualified users and their value chain. Today, the company is a diversified conglomerate conceptualized after Walmart purchased the retail operations when it set its sights in Central America in the early 2000s. From this operation, in 2010, the company decided to reinvest in industries in which it feels comfortable with the basis to be competitive. Our purpose is to continuously innovate to create opportunities for all. Innovation is central to the way we make our decisions. We have investments in power generation but due to market dynamics in Central America, we decided it made more sense to focus on the links of the energy value chain where we can add more value, such as energy commercialization for the commercial and industrial sectors. Our center of operations for our energy business is in Guatemala, a country with 20 years of experience in competitive energy markets. We are taking that experience and its full-service, customer-oriented commercialization model and introducing it to Mexico. We also want to break the paradigm where industry players are accustomed to thinking on a yearly basis. This mindset creates incompatible market dynamics where power generators calculate their project returns in 15 to 25-year periods and consumers focus on yearly P&Ls.
Q: How is Cuestamoras Energía approaching its business expansion into Mexico?
A: While the size of Mexico’s market is definitely attractive, the downside lies in electricity transmission restrictions. For that reason, Mexico is poised to develop different regional dynamics considering it cannot move kW efficiently from one point of the country to another. Mexico’s interconnection with Guatemala offers us an easy way to work our way into the country. We are in the process of establishing bilateral relationships with players in the Mexican market to export power to Mexico, as well as establishing our own regulated entity before CRE and registering as a market participant with CENACE. Cuestamoras Energía is focused on building local partnerships to propose better value to our clients parallel to our own operation. Our focus is to establish one-on-one relationships with industrial and commercial players that do not get the service they look for with CFE and do not have access to large IPPs. We can also be involved with large-scale renewable energy projects hesitant to participate in the long-term electricity auctions and are rather looking for private off-takers.
Q: What is the added value of Cuestamoras Energía’s Private Market Information?
A: Our experience in Central America has shown us that market information tends to be very segmented. Different formats can exist for the same information source, requiring it to be adequately processed to be understood. It boils down to a matter of transparency to build trust with the client via a user-friendly, educational presentation, with business intelligence undertones. Our platform is dedicated to both ends of the wholesale electricity market: power producers and qualified users. It can provide a 360-degree view of the market and valuable insights on how a qualified user’s production process is affecting its energy consumption. With this intelligence, qualified users can adjust their consumption based on energy prices’ seasonal variability.
Q: Which Cuestamoras Energía products and services are best suited for Mexico’s energy market?
A: We are in the process of consolidating our three service models. First, trading, commercialization and supply to commercial/industrial clients. Second, our ESCO service offering. Third, energy efficiency consulting. Once we merge them into a single business model, we will be able to provide an energy toolbox to Mexico’s wholesale electricity market.