In Times of Uncertainty, Energy Storage Is the Answer

Q: How has On.Energy positioned itself in the market and what areas of opportunity has the company identified in Mexico regarding energy storage? 

A: On.Energy has grown its market presence tremendously since we started operating in Mexico in 2019. In 2020, the company installed its first industrial-scale solution in a premier hotel in Cancun. Since then, it has significantly grown its capacity and customer base – getting 65MWh of energy storage operational in Mexico in a relatively short period. In addition, we have a large pipeline of projects on the way, mostly Behind the Meter.

On.Energy provides end to end, Tier 1 solutions, with every aspect of the project planned, supplied, operated and guaranteed by On.Energy, making us a compelling choice for customers. We take an integrated service approach working either directly with industrial customers, as well as other energy developers, to provide a fully integrated solution that is reliable, cost-effective and safe.

The Mexican energy storage market is attractive due to three benefits: savings, sustainability and energy security. Sales decisions are made emotionally and then justified rationally. Our solution works on both levels: The emotional selling aspects are in sustainability and energy security, while the economic logic is found in savings.

With On.Energy storage, customers can save 35 percent or more on their utility bill. In addition, as ESG policies have become paramount in recent years, key Mexican companies, such as Grupo Bimbo, Walmart and many more have chosen to deploy energy storage systems. The solution, which has been in operation for a year, has had excellent operational and financial results.

Regarding energy security, Mexico and Latin America more broadly have sought to increase control of their energy supply. However, the main problem is the lack of infrastructure and the significant limitations in distribution. Faced with this problem, On.Energy has supported customers like Grupo Bimbo by implementing power quality solutions that can provide rapid backup power as well as storage systems.

Q: How well is Mexico’s infrastructure adapted for new energy storage projects?

A: Mexico's energy infrastructure has quite well-developed areas but also others in extremely poor conditions. The good news is that battery storage is the most flexible of all distributed power resources and can operate on-site, behind the meter. In places that may need transmission & distribution upgrades or self-generation, which can take four to five years to get approved and even longer to be constructed, distributed energy storage can be deployed in a matter of months. The offer is incredibly attractive because problems can be resolved quickly.

Consumers are also enhancing their infrastructure to avoid relying on unstable grids. Therefore, more companies are now choosing energy storage solutions for a high return on investment.

Q: How important will energy storage be for the energy transition? 

A: Energy storage has an important role in the energy transition since there is a firm limitation on how much renewable energy can be incorporated into any power grid. Intermittent solar and wind power sources have serious stability problems. Without energy storage systems, companies cannot operate a reliable grid exclusively with renewable energy.

As more of these intermittent resources come online, energy storage will become increasingly important. On.Energy wants to create technology that can facilitate the implementation of energy projects and play a role in driving the energy transition forward. Renewable power sources may pose challenges, but they are non-negotiable if the world is to decarbonize.

Q: Why is energy storage still a good option despite recent changes in energy policies?

A: On.Energy has made a strategic shift to rely less on government approval, which is a major incentive for our customers. Since we do not generate electricity, the government has limited say in whether clients can install these assets, which work as a giant backup system and are restricted from injecting power back into the grid.

We greatly believe that renewables will be necessary to speed up the transition. However, the system operator has the final say as to what to dispatch and interconnect. Our strategy is to continue to focus on building a portfolio that serves consumers, the environment and regulators.

Q: How have software solutions helped the company to strengthen its product?

A: Software is at the core of successful energy storage projects, and we have had this in mind since our first installation in 2017. Software is crucial for two main reasons; first, it is the key to value generation, a battery connected to a consumer site without software cannot generate savings or supply power at critical moments. Our On.Command software balances all these different applications automatically and dispatches energy intelligently. Secondly, without software, it is irresponsible to implement storage since it is critical for the safety of the system and ensures that the business runs smoothly without risks. Furthermore, our software enables companies to have a broader, more robust and cost-effective supply chain; integrating diverse manufacturers, battery chemistries and other technologies to create a full system based on a customer’s requirements.

Q: What are the company’s plans for the short term?

A: The company recently expanded with a full-time sales presence in both the north and south of the country. On.Energy now covers the entire country with local service delivery. We have deployed more than 65Mwh/y, so the next step in 2023 is to focus on larger installations and more customers to provide them with safe and reliable solutions. We also have a rapidly growing US business, largely focused on projects in Texas and the Northeastern US that will improve grid and customer reliability in projects between 5MW and 200MW.

On.Energy Group provides fully integrated battery energy storage solutions for utilities and C&I customers.