Small Steps toward Securing National PresenceWed, 02/19/2014 - 11:09
Four years ago, Mase Energy first entered the renewable energy sector with a bioenergy project in Chiapas. The endeavor was not well received due to its use of jatropha seeds amid land use restrictions. The company changed its focus to wind energy and began scouting properties in Oaxaca. After shutting the project down, the company returned to Chiapas only to run into a number of difficulties with CFE’s grid. Additionally, the company had to earn the trust of the industry’s big players who were distrustful of yet another new enterprise trying to muscle in on the market. Its first project is being built in San Luis Potosi, with construction having begun in 2013 after three years of development. Two more wind farms are being planned for 2014.
Mase Energy is betting that being a local Mexican firm that knows the Mexican market and business practices will help it get ahead. As Sergio Martínez, the company’s CEO says, having a small, efficient and detail-oriented ally that pays close attention to details can increase any given project’s return rate. “There are highly qualified people in big public companies but their interests are usually different from those of smaller players,” says Martínez. In the case of Mase Energy, being a smaller, non-public company is about focusing on the development of the project and on benefits to the communities and to society at large. Mase Energy has developed alliances with large European companies. However, the Mexican firm must secure a majority participation in the projects to guarantee quality service and continue building trusting relationships with its clients.
The players in Mexico’s renewable energy sector are changing. A few years back, building a 200MW or 300MW project was not impossible due to the availability of suitable wind resources in Oaxaca. These conditions attracted big companies like Iberdrola, Acciona, or Gamesa, who came to Mexico with capital and expertise to spare. Their Mexican counterparts, such as Mase Energy, could not possibly compete at first. They had to start small and acquire experience thanks to a project by project learning curve. “We want to learn by taking small steps according to our capabilities in order to continue building smaller scale wind farms,” tells Martínez.
According to Martínez, Mexico has done a good job in promoting technological development, but the widespread implementation of this technology needs public and private sectors to collaborate. However, the private sector appears to continue being very skeptical of the public sector, he believes. “The government has many support programs and funds that are regrettably difficult to access,” says Martínez. “The private sector needs tax incentives to be attracted to invest in renewable energies and to develop domestic technologies,” Martínez says. As such, he is concerned about the correct allocation of public funding. “Frequently, this money ends up in the hands of companies that may not have the technical expertise or knowledge to actually develop anything concrete. This happens when the person in charge of allocating the funds is not familiar with the renewable energy sector.”
Mase Energy may be dedicated to the wind sector today, but it has not forgotten its roots in biofuels. A major challenge it faces in being unable to pursue this line of business is the lack of inputs to produce biofuels. The government promoted the farming of jatropha plants to create biofuels and collect the used oil, but this initiative did not yield the expected results. “The much needed raw materials are considered waste and agricultural communities are not aware of the best jatropha farming methods,” explains Martínez. “The Mexican government has to cooperate with the private sector to inform and educate people about these practices. Mexico has powerful winds, high solar radiation, and potential geothermal resources. There are great opportunities for growth here but the government has to further the reforms and create the right conditions for investment. This is the perfect moment to start working in Mexico. If any foreign or Mexican company is interested, now is the time to enter the market,” states Martínez.
During the next five years, Mase Energy expects to develop at least five more projects in the wind industry and, hopefully, enter the cogeneration market as well. These projects will help Mase Energy reach its objective: to be well-known for generating a large amount of megawatts in and for its homeland.