Category: Insights

Laurie Fitzmaurice, Executive Director, Center on Global Energy Policy, Columbia University

Laurie Fitzmaurice has nearly 30 years’ experience in business development, focusing on the renewable energy sector across the United States, Chile, Brazil and Mexico. 

Most recently the Vice President of Business Development at EDF Renewables Mexico, she has previously worked as Cielo Wind Power’s General Manager in Chile, Senior Vice President at Floresta Group, Vice President of Investments and Acquisitions at CE2 Capital, and Director of Business Development at Sempra Pipelines & Storage.

In late March, Fitzmaurice relocated from Mexico City to New York to assume her role at the Center on Global Energy Policy, where she will focus on creating and implementing lasting structures that will ensure the continued growth, excellence and impact of the organisation, and cultivate leadership practices that promote diversity, inclusion, and equity.

HC: You entered the Mexican renewables market when it was one of the most attractive and newly developing markets in Latin America. Now, four years later, has that market lived up to expectations? What changes have you seen? 

LF: I joined EDF Renewables Mexico at a time when the company did not have a separate business development group in Mexico, so I worked closely with the country manager to build that group. When I arrived in 2016, there was a great deal of excitement around the energy reform; indeed, there was a lot of excitement across Latin America. We participated in the renewables auctions and won two projects – a 90MW solar project and a 300MW wind project. We successfully built the solar project and the wind project is still under development.

There are six-year presidential terms in Mexico and the first phase of the energy reform was almost fully implemented by the end of the last term of the previous administration. No regulation is perfect, but it was workable.

Looking at what has happened in Mexico in the past year since President AMLO came into power is somewhat disheartening and problematic, with some undermining by the state-owned energy companies CFE of the regulation implemented by the previous government. In the last few weeks, we have seen several Chambers of Commerce expressing disappointment with changes being made, and the discourse coming out of the government and CFE is extremely discouraging because it does not support the private sector or the rule of law. There is no longer certainty that the rules of the game will continue as written, so there is some distance between what was written and what is being implemented.

The sector has been well-organised and vocal in challenging those decisions, but it is an unfortunate reality. CENACE, which oversees the electrical system, has attempted to suspend the commissioning of new solar and wind energy projects across the country and so companies are really in defensive mode; defending rights they have under permits they have been granted, which were being allocated as recently as this year. At the highest political levels, things are being stopped.

HC: How does the local Mexican power market compare to more developed ones in the region, such as Chile?

LF: It is extremely difficult to compare the two. The Mexican market was designed to evolve into a liquid trading market with financial transmission rights. It currently has day-ahead pricing, real-time pricing, with the idea that you have the data and you can nominate day-ahead and real-time. The difficulty is, with this administration, because of the way they are handling dispatch, which is not how the system was designed, the lack of transparency is essentially interfering with the operation of the market.

The new guidelines announced on 15th May by the government on the grounds of preserving grid reliability mean they are not dispatching renewables in favour of dispatching older CFE plants. The government wants CFE to have the majority of the generation market. President AMLO says he is taking back national sovereignty of power and energy markets, so there is a very ideologically-driven nationalistic discourse that does not recognise the economic reality that energy reform provided some of the lowest priced electricity in the world to Mexican consumers. The power regulation was well-designed and the concepts behind it were solid, but further implementation was halted.

The new guidelines announced on 15th May by the government on the grounds of preserving grid reliability mean they are not dispatching renewables in favour of dispatching older CFE plants. The government wants CFE to have the majority of the generation market.

HC: Mexico has been slow to execute on investment in transmission infrastructure. Do you think this trend will continue? And how detrimental has it been to renewable power development?   

LF: The way the Mexican regulatory system has been set up, when you want to build a power project you go and request system infrastructure reinforcement, including downstream of your project, which may include transmission lines. So, you are often required to put in place additional infrastructure that will enable not just your project but the system as a whole to better operate.

The previous government had five large transmission projects ready to bid out that would have represented a tremendous improvement to transmission infrastructure overall. All five were cancelled by AMLO’s government, so while it is easy to say things should not have been built without the transmission capability, there was a plan to build that out. Those five projects were going to be transferred to CFE and remain in the hands of the state, in keeping with the law, but for various political reasons they were cancelled. Had those moved forward, a lot of the current bottlenecks in the system would have been unlocked.

To be fair, show me a country that has gotten ahead of transmission bottlenecks, because I cannot think of one. We tend to build generation first and then look at transmission. Large transmission projects are difficult to mobilise from the private sector, even in the United States. In Mexico, everybody knows where the projects need to be built but the question is who is going to pay for them and when are they going to go ahead.

It is a shame because there is capital looking for those kinds of long-term investments and if the Mexican government were to move forward with some kind of reasonable structure there would certainly be capital looking to participate.

HC: The coronavirus has led to a sharp decrease in energy demand coupled with an oversupply of fossil fuels, how negatively will this impact further renewable development in the short and long term? 

LF: In Mexico, renewables were already having a tough time for political reasons and the administration has used the Covid-19 crisis as justification for further limiting the participation of renewables in the generation matrix. But I believe they were going to do that with or without the pandemic because of a preference for cheap fossil fuels.

From a Mexican perspective, the government commitment to Pemex is the same. The virus affects the government’s finances and affects Pemex, so it does increase pressure on the government due to the financial position of the country. But it does not change their ideological commitment.

HC: AMLO’s government policies have led to the cancellation of oil exploration bids and even forced private companies to renegotiate gas contracts. For an international company looking to expand into the Mexican energy market, is now an opportune moment to get in, or is it best to put on the brakes?   

LF: There are mid-term elections in Mexico in July next year. There are certainly assets to pick up at the moment, but my advice would be to watch the mid-term elections and see the dominance of the administration. Small companies certainly should not consider expanding into Mexico right now; larger, more aggressive businesses should monitor it and then see what it looks like in the second part of next year.

Our aim is to participate actively in global debates on energy issues with a commitment to supporting the transition to a non-carbon future.

HC: Switching subjects a bit, the Mexican energy industry has historically lacked gender inclusion in hiring. In the last few years we have seen a shift, with well-known companies (IEnova and ATCO) fostering gender inclusion for key hiring decisions. Given your work across Latin America, and with a Mexico emphasis, what has your experience been like as a senior executive in the energy sector there?

LF: In Mexico, I belong to two organisations for female professionals in the energy sector, one of which, Voz Experta, was founded a few years ago for senior professionals and has about 110 members. This organisation started as a recognition that industry events were being dominated by men even though there were senior women in the industry in Mexico who should be represented. The organisation is very proactive in pushing government officials to make pledges for better female representation and focusing on content, industry information and webinars.

The other group is Mujeres en Energía Renovable México (MERM), which is another fantastic organisation focusing on leadership, mentoring, and so on.

To be frank, because I arrived in Mexico after having established my career, and I think as a foreigner and as someone a bit older, I have fared better in the industry and not encountered as many issues as some other women. We all know discrimination continues to exist, and I see that whenever young women come to me for career advice.

There is still a lot of work to be done in this area and clearly large multinationals have more awareness of the evidence that more diverse businesses are more successful and more innovative. The US has some of the same issues, and the good news is that there are organisations in Mexico working to bring these themes to the attention of boards of directors and managers. The younger generation is better educated and perhaps less willing to accept poor treatment. So, the trend is positive but there is still a lot of work to be done.

HC: Finally, what can you tell us about your new initiative with Columbia University? 

LF: The Center on Global Energy Policy is associated with the School of International and Public Affairs formed about six years ago by Jason Bordoff, who was a special advisor on energy to President Barack Obama. He felt there really was not an institution that could produce timely analysis, with academic research behind it, to advise on energy issues. So, that is what the Center does and we have about 25 scholars and a staff of about 20 on the operations side, producing research that is of academic quality and also running events and producing podcasts.

Our aim is to participate actively in global debates on energy issues with a commitment to supporting the transition to a non-carbon future. Jason wanted a partner to help him run and grow the organisation, which is quite diverse from a global perspective and also in the way it brings together academics, industry professionals and government. We have a programme that focuses on women in energy that we are looking to grow, supporting young women looking to enter the industry with mentoring and so on, so clearly that is something that I am looking forward to getting involved with.