Opportunities in EV DevelopmentTue, 11/01/2016 - 13:35
The Energy Reform has not taken hold as quickly as many had hoped. There is slow progress as companies work through the large number of regulatory changes being implemented. It may take time to adapt to the new plans but one area that is ready to take off is renewable energy. Kevin Gutiérrez, Director General of Ingeteam, believes the regulatory framework is adequate and can positively impact the industry. “When it comes to renewable energy, solar actions have been particularly successful and projects are expected to start this year as more companies are joining the movement,” he says. A market leader in electrical equipment, Gutiérrez says sales of power inverters are on the rise in Mexico.”We are working on the inverter brand with an installed capacity of 90MW that has been growing fast,” he says. “In 2015, we sold 50MW and so far this year we already have contracts for 210MW.” The company expects to add another 200MW before the end of the year.
According to Gutiérrez, renewable energy can secure income for 15 years due to the relatively low risk associated with it. “The prices may always be tight but since the risk is low, all companies want a slice of the pie,” he says. “Mistakes occurred during the first round of auctions but people have to realize that changes of this magnitude always experience initial complications. Authorities are learning and making improvements to motivate serious participants. Overall, the country is adapting well to the new plans but there is always room for improvement. Certain variables such as surplus conditions are causing confusion among players." Ingeteam not only works in the solar or wind power industry but also in power electronics and as a result, does not depend completely on the Energy Reform. “We are the first inverters in the private industry with utility-scale projects,” Gutiérrez says. “We invest around 7 percent of our total income in R&D, and always strive to improve the quality of our work. After our success with utility-scale projects, we have gone into other lowpower business areas.”
The company began commercial development in 2015 and residential in 2016. For residential, Gutiérrez says the most common mistakes revolve around it being a new industry that is attracting the entrance of many players. “The issue is that some of the entering companies are not properly trained to enter the residential market,” he says. “This phenomenon always occurs in new business areas, where a technician that may have experience installing air conditioners is now attempting to install a photovoltaic system. It does not mean that the new areas are particularly complex but there are details that need to be considered to install it properly. Without a trained team, homeowners may not be able to correctly evaluate the cost of these projects.”
The market has a way of filtering out companies that are not offering adequate services, he says. Major players are starting to enter Mexico and local businesses have to adapt to survive. One way to survive the initial rough waves of the industry is through partnerships. Gutiérrez believes there are many smaller domestic companies that could be a fit for Ingeteam. “When it comes to the residential sector, we value each client but a great deal of time needs to be invested toward selling our product,” he says. “To reach every installer in Mexico, we would have to spend sales resources for each one. We find it easier to work with distributors that have a pool of products and brands.” Ingeteam seeks partners who can help create win-win situations and Gutiérrez views these kinds of initiatives as an effort to provide support to the local economy. “Our company is quite willing to help clients that have large projects but who do not understand the mechanisms thoroughly.”
The company also is entering the electric vehicle (EV) business in Mexico and this year finished an installation for CFE. The sector is starting to grow and many electric car-charging stations have already been developed. Gutiérrez believes there is a dire need for investment in EV infrastructure to make it easier for people to make the transition to the vehicles. Tax deductions would be another incentive. “The government and manufacturing companies need to provide attractive incentives for these projects,” he says. “Changing paradigms is not easy and the entrance of EVs will take time but adequate infrastructure can be an influential factor.”