The Italian Enel has a new director in the country . The Spaniard José Luis Navarro formally took office this Monday with one main objective: to seek meeting points between the company he now leads and the Mexican government.
“Enel México already has an objective, which is to serve the country (…), the main objective that I bring, personally, in this phase of leadership that I am going to face is to find that point of collaboration and union of the vision that the public sector can have with the private sector”, he says in an interview at the company’s offices. “I know it’s not an easy task, but it’s our job (…). I think there are many points in common and it is the goal that I bring: find them and be able to work on common lines.”
Navarro, who comes from occupying a position at the main headquarters of the energy company in Italy, replaces the Italian Bruno Riga, who barely spent a year and a half at the helm of the company. The new country manager denies that his appointment is related to a change in Enel’s business strategy in Mexico and has described it as a “natural change”. Riga will now occupy a new position at the multinational’s headquarters in Brazil.
The company’s main business is in renewable generation. It was one of the main winners of the electricity auctions resulting from the reform of the past administration. But, like the rest of the companies in the electricity market, the last few years have not been easy: the regulatory changes, the multiple reforms and the silence on the part of the regulator have changed the business and inhibited its growth. The Italian has not seen any major new power generation projects in recent years. Its last three wind power plants –located in Coahuila– continue without entering the commercial phase because they have not received the necessary authorizations.
Navarro acknowledges this, but says that this does not imply a paralysis of the company in the country. In recent times, Enel has focused on developing Enel X, its electric mobility business that just started in 2018. A few months ago they won a tender for the Mexico City metrobus and new announcements will come soon, he anticipates. The sights of the Italian, in this segment, is fixed on public electric mobility and they have as a plan to electrify public transport in other states of the country. They will also promote distributed generation. “Here [at Enel] nobody is standing still,” he says in the interview.
The Italian recognizes that its investments have decreased, as naturally happens when there are no new big projects. But its director says that, despite this, the investment flows continue for the maintenance of power plants and the rest of the business lines. The company did not share its investment figures for recent years.
“Indeed, we have come from a time of very great growth between 2015, 2016 and 2020. It is true that during the last two years we have not started the construction of new projects, something that we hope to do soon ”, he says. The federal government has given no indication of resuming any mechanism that allows private participation in the electricity generation market, permits continue to be granted by drops and the focus continues to be on strengthening the state-owned CFE. And there is no sign that the strategy will change in the remainder of the six-year term. “No place is simple today,” says Navarro, recounting the geopolitical changes of recent months that have changed the dynamics of the energy market.
But Enel, says Navarro, continues to develop its portfolio of future projects: for now they have plans to generate 7,000 megawatts, which may be developed in the country in the following years, if the opportunity arises. To dimension, the Italian has 18 plants in the country, 10 are wholly owned by the company and in the rest it has a 20% stake, which, together, are equivalent to 3,000 megawatts, according to information from the company. The Italian company is so far the private company with the most renewable generation capacity in the country.
“Mexico is not at a very high speed in this [energy] transition, but I think it is something normal and that it happens in all countries due to issues that may be regulatory transitions that do not entirely favor that transition or it may be due to [others]. issues, as is the case in Europe [where the war between Russia and Ukraine has completely changed the market]. But it is a trend that will also be in Mexico and it will be clear, I have no doubt that the energy sector in 2030 in Mexico will be different”, says the industrial engineer by profession. “We are going to experience a transformation that has never been seen in a short period of time, which in some countries will take 10 years, in others 20 or 30, but by the middle of the century the entire transformation will be over, so that I It seems like a key moment.”
Navarro constantly returns during the talk to the issues on which the private initiative and the federal government can agree: he says that both believe that it is necessary to expand the generation park and that electricity must be affordable for consumption: “They are much more the issues of agreeing in the Mexican energy sector than the points on which we do not agree (…). My goal is to seek out the innumerable meeting and collaboration points that there are many”.
While the three Enel wind power plants in Coahuila, which have involved investments of around 500 million dollars, have already been completed since the beginning of last year, but they have not been able to start generating electricity and with it their commercial phase, Navarro says that the energy transition is inevitable and trust that the opportunities to invest will come again: “I am optimistic and I know that [a new big project] will come soon. In terms of strategy we haven’t lifted a finger, we remain ready to do what we know how to do”.
