SMEs Require Smarter Resource Management Solutions: NXT Group

Q: What challenges do companies face in managing and optimizing their energy strategies, and how is NXT Group addressing them?

A: Companies face significant barriers due to the complexity of energy regulations, especially in sectors like mining, automotive, retail, and manufacturing. Many lack the expertise to navigate these challenges. NXT Group provides guidance throughout the process, equipping companies with     the tools and resources needed to purchase energy, reduce costs, and lower emissions.

Energy is a major cost for many industries, and companies are increasingly focused on using clean energy to reduce their carbon footprints. NXT Group helps track the origin of energy to avoid greenwashing, ensuring companies can make accurate claims about their renewable energy use, backed by verifiable data.

Q: How do you envision the new government’s changes impacting the structure and negotiation of PPAs in Mexico?

A: Legacy contracts before the 2014 Energy Reform provided incentives for renewable technologies, which are now cost-competitive. The Energy Reform foresaw the eventual migration of legacy contracts to the wholesale market. NXT Group is helping generators transition to the new system by ensuring they have the right incentives and tools. The company has been preparing clients for this transition, which is expected to improve with upcoming regulatory changes, particularly regarding Clean Energy Certificates and congestion issues.

Q: How critical is the development of grid-balancing power plants in Mexico’s energy matrix, given the increasing share of intermittent renewables?

A: The lack of attention to transmission and distribution networks is a key issue. Demand growth and generation capacity must be matched with investments in grid infrastructure. While Mexico’s extensive network has high electrification rates, further development is required to optimize the energy matrix. Intermittent renewable sources are often located far from populated areas, which means energy needs to be transported to these sites.

A positive aspect of the current administration is allowing onsite generation of up to 20MW, which helps meet demand while transmission networks lag, especially in industrial parks. This policy encourages private generation participation. However, new regulations and tools for internal energy distribution and billing are needed, particularly for solutions like energy storage that address the intermittency issue and enhance grid stability.

Energy traceability is becoming increasingly important. Users increasingly demand transparency in energy transactions to verify their carbon footprint reductions, often requiring third-party validation. Mexico’s voluntary market allows companies to go beyond the 13.9% obligation for clean energy certificates, with some aiming for 100%.

We are the only Mexican company that is signatory of  the UN’s 24/7 carbon free energy compact, which aims for granular, hourly data on generation and consumption, helping companies track real-time energy use. Mexico's market provides this granularity, enabling more accurate emissions estimates, especially with solar and wind combinations. Achieving 100% renewable energy may require storage, but greater transparency will empower both users and generators to make informed decisions.

Q: How did your platforms Arena, Sigen, Vortex and Meterac adapt to this regulatory environment?

A: Each platform addresses specific market segments, adapting to Mexico's regulatory changes, with the ability to pivot quickly in response to sudden shifts. Key to our success is combining energy expertise with software knowledge and effectively communicating data.

Sigen, developed in 2008, handles the unique regulatory framework for energy generation and distribution, focusing on small, dispersed loads and large-scale data management. Arena serves the wholesale market, supporting nearly 40% of auction contracts. It integrates market operations and helps with interaction between generators, buyers, and CFE. 

Vortex focuses on end users, providing real-time visibility and optimization of energy use, savings, and emissions reduction across various contracts. Vortex enables users to integrate multiple contracts into a single platform, giving them a clearer view of energy consumption and trends. Meterac, another platform, focuses on gas meter readings for residential use and industrial parks, supporting energy optimization processes.

NXT Group, established in 2008, is a leading energy solutions provider in Mexico. The company specializes in developing and implementing comprehensive energy projects that adhere to stringent regulatory standards.