ANGÉLICA SOTO

Mexico 2021 | GREEN ECONOMY | INTERVIEW

With Mexican consumers becoming more energy savvy and no longer merely passive, they are starting to take a more active position and demand more options.

Angélica Soto
BIOGRAPHY

Angélica Soto has been the Director General of Nexus Energía Mexico since it entered the country in 2018. Before Mexico, she worked the last nine years in Nexus Energía's Barcelona office as manager of renewable energy. She holds a master's degree in management and engineering of renewable energy from Universitat de Barcelona and an industrial engineering degree from Universidad La Salle.

What opportunities have you identified within the electrical system development program?

What we expect from the electrical system development program are reinforcements to the distribution and transmission lines, the main asset owned by the National Interconnected System. Although some power plants that were planned to be removed in 2022 will now be removed until 2024, we still expect to see the market incorporating new power plants, including renewables, that can make best use of the space available. Such power plants will be instrumental in reducing congestion as we would expect them to be distributed in areas where there is more demand. It is important to take advantage of areas that are not heavily populated and have solar resources to bring this energy to areas where there is increased demand.

Petroleum prices dropped in 2020, and there were energy developments that were not expected until much later. How will you take advantage of this moment?

Although the energy transition has been a trend in several countries in the last few years, 2020 definitively accelerated such process. In that regard, we hope Mexico is not left behind as the industry demands this energy transition. There is an appetite in the consumers for competition. They want to choose their own energy supplier and the type of energy being consumed as they are conscious about emissions. For Mexican consumers (qualified users) there are currently three options—energy efficiency, on-site generation, and the wholesale electricity market—for energy supply. With the possibility of choosing one's own supplier, there is a wide spectrum of options for consumers, and energy suppliers along with power generators are forced to become more competitive, increase savings for consumers, and move forward the energy transition agenda.

What challenges have you faced in the Mexican market?

We have two main challenges. One is to break the fear barrier that we have seen in other markets, such as the Spanish market and in emerging markets. Consumers wonder, if I change my supply provider, what happens if the power goes out? And how can you guarantee that the power will not go out? These fears come from a lack of knowledge of the energy reform. All electricity users, who are connected to the National Interconnected System, have the constitutional right to the energy supply distributed and transmitted through the electrical grid managed by the Federal Electricity Commission. Having electricity is a constitutional right, regardless of the supply provider. Therefore, the risk of the quality of the supply guarantee does not exist. The second challenge we face is the red tape and administrative and bureaucratic procedures that are slowing down the energy transition. These bureaucratic and administrative procedures that users have to go through to switch energy suppliers can take anything from four months to a year. However, in mature markets such as Spain, changing providers takes just days. These barriers mean there is no liquid market that promotes new developments, new investments, more participation, and a more competitive market.

What main opportunities do you see in the market, and why are you still committed to Mexico?

The opportunities in Mexico are endless. Of the qualified users we have identified, only 500 are registered. So, we still see great potential in the Mexican market. It is a wonderful journey on which we anticipate that about 100,000 or more potential qualified users can migrate to the wholesale electricity market. Mexico is an electro-intensive country that depends heavily on its input and energy costs to be competitive. 2020 affected every industry, and being able implement cost reduction measures and increase efficiency has become more important than ever to boost economic recovery. All business must look for ways to reduce costs as much as possible, and we as qualified suppliers can make a real difference in terms of costs. We consider ourselves an energy solutions provider.