Miguel Ángel Alonso Rubio : Interview

Interview : Miguel Ángel Alonso Rubio

How will the second electricity auction lead to increased efficiency in the renewables sector?

ALONSO: The results of the first electricity auction were key to the success of the second auction, boosting confidence in the mechanisms that the government had put in place for energy reform. The latest auction increased companies’ desire for electricity projects, making them feel more secure and confident. As a result, much more competitive prices were offered. In terms of distribution there are still opportunities to build infrastructure. With the results of the first auctions, generation projects have started to develop. Nevertheless, the country needs to create more auctions to spur new generation projects and help distribution companies increase supply.

To what extent can the restructuring of the Federal Electricity Commission (Comisión Federal de Electricidad, CFE) boost the use of renewables?

MIGUEL ÁNGEL ALONSO RUBIO: Restructuring the CFE is a complex process, however, it is leading to the creation of partnerships in the electricity sector. Newly created companies improve efficiency in the market, developing renewable energy infrastructure, such as wind and solar. This situation has led to the emergence of well-structured intermediaries dealing with the CFE, even the creation of CFE Calificados, the CFE’s subsidiary for the supply of energy in the wholesale market, which has boosted dynamism in the sector. This situation will give the CFE a fresh start to develop new infrastructure projects, with the reforms making clear that the CFE is still in charge of distribution and transmission. However, distributed generation – through on-site generation – will be the next milestone of the reform, with the implementation of distributed generation set to positively influence large cities such as Mexico City.

The way the industry will adopt distributed generation remains unclear, the process could either be exponential or systematic. This will change the distribution profile of cities since all kinds of companies will be able to profit from it. Countries and even big cities will face changes in consumption, their demand and generation curves, and electricity prices.

How can private actors in the industrial sector more effectively leverage clean energy?

ALONSO: As a result of the energy reform, competition among suppliers and distributors has risen. Currently, there are more than 30 active suppliers in the market competing for both the conventional and the renewable energy market. Given the emerging interest in distributed energy, companies can produce their own energy through renewable mechanisms. The industrial sector and the population will benefit from lower energy costs, and as a result industry will also become more competitive.

To what extent can renewable energy projects help galvanise economic development in rural areas?

ALONSO: Renewables are social by their very nature, they are committed to rural development. When renewable energy projects are built, the social and economic situation of rural communities improves. Energy companies’ social projects normally represent long-term solutions for the communities with which they are involved. There is a necessity for companies to create educational programmes to teach the younger generation social and environmental values for the sake of the planet’s future. The government is organising its first social auction, through which more than 10,000 areas across the country will be electrified. Given the economics and efficiency of renewable energy, they could be a solution to economically developing rural areas. There is no need to have a subsidised electricity tariff, but simply to provide renewable photovoltaic installations. In this way, we can establish an equilibrium between the customers’ needs, installation costs and sustainability.