Interview: Camilo Serrano
In what sense did the reforms enacted earlier in the decade help to boost the energy sector?
CAMILO SERRANO: Although far from complete, and with considerable regulatory issues remaining, the energy reform opened the door to competition and attracted the attention of international energy companies that see Mexico as a new market with great potential.
As part of the reform, the energy auctions can be considered – up to a certain level – a case study and a success story in the region. They proved how efficient this mechanism is in increasing competition and ultimately affecting energy costs, which are among the lowest in the world. They also promoted the country globally and attracted a large number of investments to develop the local power industry.
The cancellation of the auctions did not spell the end of opportunities for the sector. Instead, there is a growing trend towards the business-to-business (B2B) market and meeting the demand from private companies through clean energy projects.
What qualities make Hidalgo a good place to compete in Mexico’s renewables market?
SERRANO: Mexico has undeniable advantages in the solar industry, with one of the world’s highest levels of solar irradiance. Hidalgo has its own micro-climate, which makes it a suitable environment for solar at lower temperatures than the Sonora Desert, for instance.
In the B2B market, Hidalgo is particularly attractive because of two key factors: its strategic location close to the main points of energy consumption and the availability of land for the installation of solar panels. Hidalgo can serve as a convenient supplier for Mexico City, which is the largest consumer market in the country, as well as for the State of Mexico and the industrial Bajío Region, which are home to a large number of big companies and large-scale projects.
Hidalgo represents a service platform and, most importantly, an energy solutions provider that can help companies to improve to their competitiveness, reduce costs and build an environmentally friendly brand.
In addition to the state’s strategic location, other strengths that encourage companies to establish their businesses here include the role of the current government. The two state energy laws that were approved in 2018 created a regulatory framework that will form a solid and sound basis for creating a long-term energy development plan. The government has played a proactive role in providing support to private investment and bringing energy companies and communities together, which is fundamental for the success of any project of this magnitude.
To what extent is Hidalgo’s labour market prepared to meet energy companies’ productivity needs?
SERRANO: Finding skilled labour in the state has been an issue for a long time due to a lack of higher-education graduates, a low capacity for integrating young people into the labour market and poor economic growth in the past. However, the state has created a virtuous cycle through which companies and educational institutions can link to each other.
The challenges are still there, but we have seen the administration become increasingly involved in balancing the needs of the private sector and the skills required in educational institutions. In fact, over the period when our plant was under construction, we employed around 1000 people and never experienced any setback in its development, nor did we need to recruit skilled labour from outside the region.
There are different levels of qualified and unqualified human capital available in Hidalgo, and these workers are able to achieve a wide range of different work purposes and goals. We have faced no shortage of skilled employees throughout our entire development, and there is an increasing certainty that the workforce required to undertake any kind of project is and will continue to be available within the region.
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