Francisco Hernández-Manzano
Founding Partner and Director
Iniciativa Energía
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Insight

Tearing Down the Information Barrier

Wed, 02/24/2016 - 12:18

Energy security ranks highly on the public agenda of developed markets and this has not been always the case with Mexico. “Although Mexico is a large exporter of crude oil, it is a net importer of refined products; it imports more than 60% of the gasoline it consumes and it is dependent on natural gas imports, even though it has plenty of reserves. Therefore, Mexico does not have real energy independence,” comments Francisco HernándezManzano, Founding Partner and Director of Iniciativa Energía. While studying in Germany, he realized energy efficiency and energy management were part of the daily corporate culture, with companies concerned with obtaining certifications and improving their energy management systems. All these factors made him and a group of colleagues realize the potential for energy management, energy savings, and tracing a path toward energy security in Mexico. This is how Iniciativa Energía, a firm specialized in energy efficiency and energy management systems, was created.

Although the firm’s strongest segment is the private sector, it has important projects with the public sector. “We like working with the government, mainly with CONUEE and the Ministry of Energy, because there is huge potential for improving operations in municipalities and other areas,” Hernández-Manzano asserts. Lucía Martínez, Partner and Environmental & Renewable Energy Director at the firm, explains that even when working with private clients, there are many elements in a project that directly involve the public sector, such as procedures, contracts, or certification processes. For Hernández-Manzano, it is important for the public sector to invest in energy efficiency because 40% of their government energy expenditure is wasteful spending. Iniciativa Energía has already mastered the art of working with municipalities, which many players find cumbersome. “Once the Chamber of Deputies authorizes budget allocations, we look for an interested party. Iniciativa Energía carries out the technical annex and helps with procedures, such as permits and audits, assisting municipalities until the authorities approve the projects. Municipal presidents can rely on their links with federal representatives that can influence the approval of the projects,” tells Hernández-Manzano.

Iniciativa Energía seeks to work with municipalities with liquidity and a relatively large population. The problem lies in the fact many municipalities, even the ones that have the cash flow, are unaware of the resources available from the federal budget program, or do not know how to gain access to them. “Everyone has access to energy efficiency programs, but not everyone is prepared enough to access them or knows which agencies to approach. The government should provide additional assistance services.” He notes that a municipality’s source of income, such as property taxes or revenues from utilities, is limited. “Imagine what would happen if the federal government truly strengthened municipalities in technological capabilities, civil servant career paths, and training in accessing funds. This would result in a sound and effective federal energy efficiency program.”

Martínez is convinced that the success of well-implemented programs depends on tearing down the information barrier. “Many governors or municipal presidents are not knowledgeable on energy efficiency, so they think they are making a difference and being energy efficient by installing solar panels and LED lights.” The situation gets more complicated when lighting solutions providers develop energy efficiency projects. According to Martínez, the challenge and solution is to broaden the municipalities’ vision, educating them on energy efficiency, availability of resources, and optimization of these systems. Hernández-Manzano says the joint participation of the Ministry of Energy, SEMARNAT, and CONUEE, could have a deep impact in the scope of these programs because they have to guarantee that the consulting firms they are hiring have the right certifications, credentials, and experience in energy management.

Hernández-Manzano feels optimistic because he has worked with people who believe in their municipalities and seek advancement. More structured municipalities already know what they have to do each year in order to secure resources and who to approach for assistance in processes and technical aspects, even if their executive leaders change. In these cases, Iniciativa Energía supports the authorities that already know what path to take by giving them alternatives. Energy efficiency is also a promising area, since HernándezManzano says some municipalities have already obtained their energy efficiency certificates in pumping systems, lighting, government buildings, and vehicular parks. The firm continues to gain the necessary experience to become a notable player, although Hernández-Manzano would like to see more competition so that the industry can thrive. He concludes with a piece of advice for those who wish to work with municipalities, “The problem with municipalities is that, although they are the main client, sometimes they are not the ones making the final decisions. Patience and perseverance are crucial.”