What is the company's strategy to seize the opportunities made available by Mexico's energy reforms?
One of the main objectives of the reforms was to lower the cost of energy so that consumers have a more competitive platform for their business or personal consumption. The second factor is that Mexico wants to be part of the movement to generate cleaner energy; several new, clean energy projects such as solar and wind energy are developing across the country. Third, Mexico is looking to expand and improve the quality of its electricity infrastructure. Within transmission and distribution, provisions are being made for private investors to participate in future projects. Finally, the government wants a competitive market to attract investors into the Mexican market. Orca Energy is looking at all available opportunities. We mostly participate on the supply side but are considering projects in energy generation and infrastructure
What are Orca Energy's projects in the field of energy infrastructure development for the electricity sector?
Our focus on supply is our core participation in the market. We started operations in July 2017, and we are focusing on the opportunities to create a strong energy portfolio. Moreover, we are targeting large consumers to create a good balance within our portfolio of energy and our portfolio of users. Apart from opportunities in energy infrastructure, Orca Energy is searching for generation projects to establish third party agreements with independent generators. There is potential in the transmission lines and distribution segment, especially in partnership with well-established companies
Do you think there is a bottleneck in Mexico's transmission infrastructure?
New power sources create the need for an expansion of transmission lines. For example, there are a number of wind farms in the Ventosa area of Oaxaca State that require a sufficient number of transmission lines to connect with the grid. The same applies to Mexico's Tamaulipas and Sinaloa regions; Baja California is the only area that is not connected to the national grid. Hence, there is huge potential for a new transmission line to connect Baja California with the rest of the country or for electricity to be imported from the US.
Do you think Mexico's wholesale electricity market is functioning optimally?
The market situation is far from optimal. Mexico is in the early stages of its energy reform. The conditions are okay for this stage but there are issues that need to be clarified to improve and mature the reforms. For example, tariffs are one of the biggest challenges to having more participants and qualified users in the market. The tariffs released by the Energy Regulatory Commission (CRE) in November 2017 are transitional, and there is no long-term vision for how tariffs for basic users will behave. Another important issue is that companies have questions regarding how to operate; the industry has requested governing bodies respond more rapidly to questions. The last factor to ensure optimal market functionality is to make the system flexible. It needs to be easier and faster for users to change supplier to create a competitive model for qualified suppliers.
What are your short-term goals at Orca Energy for 2018?
The long-term aim is to have an energy portfolio 500MW within five years. For 2018, our goal is to get around 100MW in our portfolio in order to be able to trade and supply our clients. This is a huge goal and a major step for a company that only started operations eight months ago. The present need has led the market to behave correctly and move in terms of liquidity and transactions. The company is aware of the need to create a diversified portfolio of energy. Our strategy is to have the most diversified portfolio with the best efficiency in the areas where the largest consumers are based—there are massive opportunities in the northeast and west of Mexico.