Sarah welcomes special guest Enrique Ochoa Reza, an energy specialist, Ph.D. in Political Science and Master’s degrees from Columbia University, Lawyer from UNAM and Economist from ITAM, professor and author who was a Federal Congressman in the Mexican Congress and before that, the CEO of the Federal Electricity Commission (CFE), Mexico’s state-owned, nationwide, power and natural gas company. He recently joined IFS to lead the company’s Energy and Utilities Business Unit and patiently enlightens Sarah on the top energy trends shaking up the status quo and forcing organizations across the globe to evolve and adapt.

Sarah: Welcome to the Future of Field Service podcast. I’m your host, Sarah Nicastro. We’re here today to talk about the future of energy and utilities. Earlier this year, IFS welcomed a new member of the team to head the energy and utilities organization, which is Enrique Ochoa Reza. Enrique, welcome to the Future of Field Service podcast.

Enrique: Hi Sarah. This is great to be here. Thank you very much for the invitation.

Sarah: Thank you for being here. So Enrique’s bio is impressive to say the least. So I’m going to read some of the highlights Enrique, and then you can fill in some gaps. So Enrique has been in the energy space for more than 20 years. He holds a PhD in political science and Master’s degrees from Columbia, a lawyer from UNAM. Tell me what that is?

Enrique: Yes, the National Autonomous University of Mexico. I am Mexican.

Sarah: Okay. Yes.

Enrique: And I studied law in the National Autonomous University down there.

Sarah: Excellent. He’s been a professor. He’s a published author. He was a Federal Congressman in the Mexican Congress. Served as secretary of the Energy Commission and oh, what am I missing? There’s a lot. He was awarded Person of the Year by the Oil and Gas Magazine in 2015. And as I mentioned, he has recently joined IFS to lead the energy and utilities business unit. So Enrique, go back through a couple of those points. It’s a tough bio to read, because there’s so much to it, but tell folks a little bit more about yourself and some of the background that you have in the energy space.

Enrique: Yeah. I’ve always been fascinated by energy. And Sarah, I think it’s one of the most important things for human mankind. And so, that I always focus on my studies in economics, then law, and then political science, because I wanted to participate in public policy and energy in Mexico. And I had the opportunity to do just that some years ago when I was a deputy secretary of energy in Mexico for hydrocarbons. And back then, I participated in an overall energy reform in Mexico to open up to private participation, the oil, gas, and power sectors in Mexico. After Congress went to a constitutional reform and then some legal and regulatory amendments, I was appointed CEO of Mexico’s nationwide power and gas utility, which I run for over three years. And that was a fantastic moment, because we had to transform the utility to allow for private sector competition, both national and international, but more importantly, to strengthen the national utility in order to move from fuel oil, which was a very strong fuel use for power.

Enrique: But as we all know, it was expensive and highly pollutant and we transit to natural gas and renewables. And it was at that moment in time when renewables were succeeding in becoming affordable, as you all know, when back in two decades ago, a decade and a half, we had to choose between producing energy with renewables that was more expensive than other fuels, but it was clean and comfortable with the climate change challenges that we were facing. But it was a choice, it was a trade-off. You’ll have to accept that you will have to pay more for that power, not any longer. Now, as we have moved towards very important technological advances, humankind can have at the same time, clean energy, that it’s good for the environment, but it is affordable as well. So now, that has created an enormous incentive for utilities worldwide to compete and to attract private and public investment into new technologies that allow us to substitute fuel oil or diesel from your portfolio to generate power and to include more clean energy that makes your portfolio of power generation more affordable and better for the environment.

Enrique: And that transition was one of the busiest that I had to oversee when I was CEO of Mexico’s utility. The other big one was to bring more natural gas from the cheapest source of natural gas in the world, which is Texas. Mexico, as we all know, has a big border with the United States and part of the reform allowed for the public utility to be able to buy natural gas from its cheapest source. In the past, it was linked somehow to the supply of natural gas from its sister company Pemex, which is Mexico’s oil and gas monopoly, but sometimes Pemex did not have enough natural gas for the industry, for the commerce, for public consumption and for the national utility. So when there were some shortages of natural gas in the country, CFE will have to go back and use more fuel oil or diesel, which were again, more costly and more pollutant.

Enrique: So then, the energy reform allowed for CFE the public utility to be able on the one hand to go towards renewables and on the other hand, to be able to build an extended natural gas pipeline that linked us to the natural gas coming down from Texas, and that allowed to reduce costs of energy production and on the other hand to decrease the amount of CO2 emissions, because natural gas is much more cleaner than fuel oil or diesel when you use it for combustion for power generation. So it was a win-win situation in both great transformations within the public utility. Natural gas and renewables was the answer that technologically was able to provide the public lower costs in energy and a better source of power with less pollutants than before. So for me, that was a fantastic transition and I see that happening worldwide. Most important utilities are going towards clean energy and they’re also going away from coal, from fuel oil or diesel in order to use more balanced portfolio for power generation.

Sarah: Okay. And so, we’re going to get into quite a few things that you see happening that are really, really changing the dynamics in energy. So you have 20-plus years of extensive experience in, as we kind of walk through a variety of different aspects of this space, which gives you a very insightful and unique view on what has in recent years and also what’s coming. So that’s what we want to talk a bit about today. So, the reality is that for quite a long time, this space was very stable and some would say maybe even a little bit boring, but just sort of, just very even, very consistent. And now all of a sudden, we’re in a time where some of the factors you’ve mentioned and others are causing tremendous change and it’s a real shake up. So talk a little bit about some of those different factors that are contributing to such a stable industry coming to a point of just quite a bit of disruption.

Enrique: Absolutely. As you will say, energy sectors tend to be long-lasting. They seem to be stable and sometimes for some, even boring. However, there’s some moments in time when there’s important amount of change, technological change, and also consumption change that drives for utilities to have transformations. And this is one of those moments in time Sarah, this a moment of profound change, it’s driven by different factors. One of them obviously climate change has become a main concern. We have just come back from COP26 in Scotland that united the world leaders, trying to reach an agreement that will allow the world to focus on reducing pollutants. And on the other hand, you have a consumer that’s always more aware of that challenges looking ahead and therefore, even important businesses or commerce, try to respond to that by producing its products with clean energy in order to make their consumers know that they are also concerned about the environment.

Enrique: So technology has been leading the way into making more affordable the fact that we can use the sun and the wind to create clean energy and make it available for the many. And that has led also for consumers, for household consumers, to be able to put solar roofs in their homes and to produce the energy that they will consume. And this is a very important moment in time when every time more households find that this is affordable. And although it requires a lump sum investment on the first year, it takes off in three to five years. And then, you have a long time to make economic sense of that investment. So more people have become producers of energy, and there’s a terminology for this. Consumers have become producers, they’re the consumers. And what you can see in the future and it’s happening already in many important cities in the world is that a household would have a solar roof. It would have even a battery in the basement, and they will use the power that they generate through the day. They’ll store it in a battery and they will use it through the night.

Enrique: In the past, that was not really necessary and it was a little bit expensive to have a battery. So in the past, what used to be the battery of everybody that had solar panels was the utility. The utility will take the energy that you were producing in your home through the day and with that bidirectional meter, we’ll know exactly how much energy it was taking away from you. And when you came back on the evening and you turn on your TV and you need it for your refrigerator, and to do your house lighting. You will be using energy at night that you will be pulling back from the utility. And that bidirectional meter we’ll make a balance of that. And at the end of the month or the period, they will let you know how much you generated, how much did you consume, and what was the balance too. That was the traditional way we were doing these things, not anymore.

Enrique: Now with household batteries of different brands and of different capabilities and different costs, it is becoming affordable for the citizen to be able to produce its own energy, store it in their battery, and use it again. More importantly, we can talk about that in more detail, electric vehicles are also appearing in the ecosystem to transform the way we transport ourselves. So if you want to see it in a way that it closes the cycle, somebody in their household can generate with a solar roof, store it in their battery or in their electric vehicle, recharge its transportation and be disconnected from the overall utility in the services that they are using to transport, to consume, and to entertain, or even to work. The world is becoming every single time more electric and people can be that original source of its power and the utility therefore has to adapt to this new reality and adaptation that’s what they’re doing right now.

Sarah: Right, okay. Yes. So the way you describe it, and we think about how that traditional model is evolving to this new model where really the consumer is in control and can do a lot of this themselves to be more independent. What does that mean for the organizations that have thrived off of that traditional model? And how do they need to, if you were to give us kind of a best case scenario, how do they adapt? So how do they evolve to meet the needs of today’s reality instead of staying kind of on that historical model?

Enrique: I’ve seen two trends, and obviously there are wide variation in the world, but I’ll say that I’ll see two trends. One trend is some traditional utilities that will think that this is not going to be a game-changer and therefore, they’re a bit on denial and they will say, “We do not need to change, because the overall industrial and commercial and big household consumption is not picking up on clean energy. The electric vehicle footprint is low and some countries are going to be slower than others to adopt change.” So they can say, “We still have 5, 10, 15 years for that.” So there’s not much that they are doing right now. They think that it’s business as usual.

Enrique: However, there are some other utilities who are embracing this change, who are not only embracing it, but leading it. And they’re coming up to the household and say, “Guess what? We are here, where your traditional utility, we are embracing change, we’re promoting it. And we can provide you with solar panels and services that will allow you to do this transition with us. And we’re here and we’re not going anywhere. We’re up here to serve. And we’re here to help.” And therefore, they’re embracing new business units that provide and help citizen with this change of technology to install solar roofs, to install batteries, to have long-term relationships with them to actually help and finance these installations and to advise them, how can they be even more efficient and more knowledgeable about the energy that they’re producing and the consumption that they’ll be going to go through in the following five years or 10 years as their investments payoff. And I think those utilities are doing the right thing.

Enrique: They’re leading the way, and they’re making every citizen have a trustful partner to have and drive through this transition. And I think that the key reason to go this way is because it’s becoming every time more affordable to do it. So if you don’t lead the way, the market is going to lead the way, and you are going to be sitting down in the sidelines. There is an industry that went through this type of transition with some variation obviously, 20 years ago. And you might remember this era when cellphones first arrived, when we were younger, cellphones were big instruments, they were heavy, they didn’t last long, they were very expensive. And some people will say, “There is no need to worry if you’re in the telecom industry, because cellphones are expensive. Okay, people are not going to like them. They will always like to go back home and call from home. Who will want to carry a phone with them in their pocket?”

Enrique: Some communication companies denied that change. And remember that in the past, your telephone company will charge you for every call that you make. And long-distance calls were just prohibited. I remember back home, my mother wouldn’t let me call my cousin, because it was a long-distance call and it was just crazy, costly. So nowadays everybody has, cellphones are more numerous than hardline, phone lines. People have one or two devices. Even youngsters use it for their social life. It’s not even a communication device. It is way more than that. It’s even a working device.

Sarah: I was going to say that, you’re not even charged for calls anymore. I mean, it’s really just based the access or volume of data, but the idea of being charged for a long-distance call, that’s completely obsolete at this point.

Enrique: So the communication companies, and you’re right in the point, communication companies that before they had the revenue for every call that you were making, now that they changed the way they charge for services and they charge not for a call that you make, calls are unlimited, long distances are no more. And even you have some apps that allow you to make calls without even going through the communication company. So that has changed in a very important way. And the way that utilities think of the communication’s sphere changed their business system to collect cash through the services that they provide changed as well. And I think that’s the type of change that we will see with utilities. As every citizen will have the chance to generate its own power, utilities will have to be there to back up the system and to make sure that everything runs smoothly, but they will have to evolve in the way they collect their fees and they charge for services.

Enrique: And I think that those utilities that are thinking about those new ways will lead the way and those utilities that do not think that that’s going to happen and stay on the sidelines, will maybe having some risk in their overall business. And they will miss opportunities that others will take in their place.

Sarah: But you made the point too, that the risk to the companies that maybe don’t believe that this is a fundamental point of change. It’s not just them versus the other utilities that want to lead the way. They also have the risk of third-parties entering the space to compete as well. So it’s not just which utilities are going to get it and which aren’t, but you may see other organizations come in to provide some of those needed services and support to the consumers, if these organizations don’t want to step up and fulfill those needs.

Enrique: And there are areas within the industry that are changing faster than others. And I’m going to be stating the obvious, but utilities have at least four different services that they provide. First, they generate power. And back in the days, they generated power far away from the cities. They transform some fuel into power and they bring it into the cities for consumption. So one is power generation. The second big thing that they do is to dispatch and transmit energy from faraway places into all the regions and cities of a nation. So you see these big high towers that transmit power from high voltage, from one place to the next. So transmission and dispatch is another big, important activity. The third one is distribution. When low voltage energy comes down to your cities and you can see it in city posts and cables that take you down to your house or to your commerce. And that’s that distribution activity.

Enrique: And finally, it’s wholesale. To actually sell you the power and all the services that I have mentioned and you pay a bill for it. The two sectors that have been open for competition in many places now, in many parts of the world is power generation and wholesale. Now, transmission and distribution are what we call natural monopolies. It will not be efficient to transmit, to create an additional source of transmission or additional posts of distribution to have competition in that area. Those areas tend to be regulated. They’re natural monopolies, and they work that way worldwide. But power generation and wholesale are open for competition in many countries and even more so, because now the citizen can generate and commerce with its own power. So you will see that change in those areas.

Enrique: The utilities used to be integrated and provide the four activities in a single bill. That’s also changing. Now, in different cities and countries where power generation is a source of competition, you can choose your provider of power. Now you do have to pay a fixed rate for transmission and distribution, and then you can actually choose who’s going to sell you the final product. So those are the areas of where utilities have to be participating, and regulators are making that participation happen as well. So this is a trend that’s happening on the one hand, because of the choice of the people and on the other hand, it’s also being imposed by the decision of energy regulators in different countries that are advancing into this direction.

Sarah: So the end result is these utilities have to work to become more competitive in nature than they have been historically. Particularly, when it comes to the consumers.

Enrique: Absolutely, because there’s also some stranded assets of long-term investments that were done 5, 10, 15, 20, or 30 years ago that are essential for the overall power system to work. And those assets need to be recognized and paid for. In addition to that transmission and distribution grid also needs always to be modernized even more now so, that so much information is going to be transmitted and require from consumers and the utilities, so that we can include an ever longer list of electronic utilities, electronic appliances that we’re using. So we need to have those transmission and distribution grids modernized and up for the challenge of having even more data going through them. So we definitely need to keep on investing in those things. And that’s where the regulators come into play. And that’s where utilities also need to inform properly regulators, what are the real costs of those systems that it’s in the best interest of all that they remain to be very importantly, well-modernized and well-maintained.

Enrique: So I think that’s where the overall challenges lies. We need to find a middle ground between the advancement of technology and the right of the citizen to generate, consume and sell its own clean energy. And on the other hand, the fact that we need all those assets from utilities, for transmission and for distribution, and in some sense for generation to create a stable system to be there. And it is a common good that we all have to chip in and pay.

Sarah: Okay. And then, you have the idea that when you talk about the move to consumers doing more of this themselves and utilities needing to respond by introducing new services and kind of thinking about how they evolved their revenue models, it seems like those would be tasks that they really haven’t had to think about much, or at least in quite a long while, is that accurate? So sort of when you just think about sort of what’s the new value proposition? And what’s the go-to-market strategy? And how do we market this? And how do we differentiate ourselves? Those seem like things that under the traditional model, most of these utilities probably haven’t had to flex a lot of those muscles. Is that-

Enrique: Absolutely. And let me give you examples of them. I’ve seen utilities that in order to deny the fact that a citizen can put a solar roof in their home. They just denied the fact that you can buy or install bidirectional meter that will allow you to send back power to the system, where you’re producing it and bring in electricity when you require it. In the absence of that bidirectional meter, you can just not have the success of a solar panel working. So a utility will have a gate-keeping power by saying, “There’s no more bidirectional utilities available, and therefore I cannot connect it to you, and therefore, it’s not a wise investment for you to put solar roofs.” In the opposite extreme of that, there are utilities that will facilitate you that bidirectional panel that will allow you to buy it or rent it in payments along a year or two. And therefore, it makes it easier for you to do that transition.

Enrique: Moreover, they can even say, “I’ll give you the whole system integrated and I’ll give you support to maintain your solar panels, your batteries and your bidirectional meter a long time.” So those are two ways that utilities varying their approach to this. And the same thing will happen with batteries or electric vehicles. Electric vehicles and the first time I drove an electric vehicle, it only could run ultimately, 70 kilometers for every recharge. So, you will always be worried that if you will be far away from your recharger, that you will be stuck in the middle of nowhere. And that’s a main fear that most people still have today. So the way to go away from that is that as much as you have gas stations in every corner, in the big city, you need to have available electronic fast rechargers so that you will never feel that you are going to be left with no rechargeable nearby with your car.

Enrique: So now, there’s ways to go about this. Now, electric vehicles can run over 300 kilometers or more without a recharge. So that technology has improved. And on the other hand, it could be very wise that cities continue to establish public recharging stations that become frequent, and that can be nearby your home, your place of work, or the school of your children, or you can recharge while you’re receiving coffee. And therefore, you feel that there, you do not need to fear that your car is going to leave this stranded someplace. In addition to that, some electric vehicles are also suggesting that you can have an electric recharger at home. So it is like when you recharge your phone or your iPad, you ride home, you connect your recharger to your car and the app allows you to choose at what time are you going to be recharging?

Enrique: So maybe you are going to recharge your car every third day at the middle of the night, when the cost of power is the lowest. And therefore, you will be even saving more money in comparison to the gas pump, or maybe you can just do it in your office and when you arrive to your office, you connect it, and in 20 minutes, your supercharger allows you to have a car recharged for the rest of the week or 15 days. Some car makers are even suggesting that they will have a battery for 2024 that will allow you a 1,000 kilometers of autonomy. So maybe you’ll have to recharge your car only once a month. So that cost of recharge for electric vehicles is going to be so much lower in comparison to charging for gas at your usual station. That’s going to be a game-changer.

Enrique: Now, some people that I talk to in a recent conference in Milan, some will be saying, “Well, that happen maybe in five years in 10 years, and it will never happen in my country.” Well, that’s exactly the denial that I was telling you about. Others are saying, “Here’s the technology it’s affordable, you can put it in your home, in your office or in the public space, and it’s going to be happening as soon as next year in the following year,” and so on. And some countries are seeing the rate of new cars being electric vehicles increase in a formidable way. Most Scandinavian countries, they sell more new cars that are electric than any other type of hybrid or gas or diesel. So there’s variation in how countries will adapt to change. But I think that change is happening and there’s no way around it.

Sarah: Yeah. I definitely agree. And I think it Enrique, it’s interesting, on this podcast, we haven’t discussed energy super-specifically many times. It’s more just sort of service and more horizontal trends, but what’s interesting to me is this idea of disruption and the idea of how these utilities need to a, acknowledge that disruption. I mean, that resistance to change is the first barrier to overcome. That denial is futile, I think. And so, the first thing is you really have to see the reality for what it is. But I think a lot of that resistance comes from fear and the uncertainty in how an organization is going to pivot to meet the new needs. And so, I think in a lot of ways, it’s a very natural response, because you want to protect the way in which you’ve operated and been successful.

Sarah: And so, one way to protect that is to deny that there’s a new reality upon us or coming. But I think one of the points that I was thinking about when you were sort of talking about the two ends of the spectrum, like the company that’s in full denial, that just refuses to think that this is happening, and then the company who is proactively going out and saying, “Oh, you want to install solar panels. Great, we can get those for you. We can support you. We can help you,” and getting ahead of that disruption. The reality is it doesn’t have to be, there’s a lot of gray area in between those two realities that is the transition time. You have early adopters that maybe already are self-sufficient in their energy, but you have a lot of residential areas that will take quite a bit of time to get there. And so, I think one of the points that seems important to make is that these organizations, you can both accept the reality and start planning for the future while continuing to deliver your current business model.

Sarah: You saying, “Yes, this is coming,” doesn’t mean that cut, you can no longer make money doing what you’re doing. There’s a chunk of time here that this transition is going to happen under. And so, we see that when we talk with organizations in manufacturing that are on the journey to Servitization. That whole journey is about moving from someone who manufactures and sells a product to being an organization that delivers an outcome, okay? And that’s a whole continuum of steps. And oftentimes, you don’t just jump from one end to the other. And so, this seems like a similar situation where part of what these utilities need to be thinking through is how do we embrace this new reality and what’s coming even in the future and start preparing for that while continuing to support our current business. And just understanding that you can do both simultaneously for a bit while you get to the point in the future where things are transitioned. Does that make sense?

Enrique: Absolutely. Let me give you an example of that. Now that I have been traveling to Europe and to the U.S., what I have seen in airports and what I have seen in the conference that I’ve attended, is that an industry that is being adapting quite quickly to these changes are the sisters and cousins of utilities which are oil companies. You can see that oil companies have moved from being their traditional business model of extracting oil and gas from the ground or the sea, and now to become an energy company in a way that they’re also buying and building wind farms and solar farms. So they’re evolving from hydrocarbons to clean energy. Not only that, in their gas stations, they’re installing electric vehicle superchargers, because gas stations have two source of business. One, I’m saying the obvious, they sell gas, but second, they have a convenience store that is a source of income, sometimes even more important than the gas pump.

So they do not want to lose that flow of income. I saw in a conference that they estimate of that gas, gasoline, diesel, and car industry is over $1 trillion annually. That’s the size of their business. And they don’t want that business to be taken away by electric rechargers that go and take the consumer elsewhere, away from their gas stations. So they’re putting the electric vehicle rechargers, where you used to go and charge gas. So they’re transforming their product into adapting to this change. Now utilities were the natural beneficials of this change of electrification, of transport and electrification of the world. So for utilities, you should be easier to transit to be the paramount of clean energy and the promoters of electric vehicle recharging. But if they do not move fast enough, some of those who do not move fast enough, guess what? Your cousin, the oil company is doing it for you.

Enrique: So they are now, they have a big advertisements in airports, what they say? “We got it. We’ve heard you and we’re transitioning, and we are not anymore an oil company. We are now an energy company and we have solar winds, electric vehicles, and they’re going to move into that direction.” So that change is happening. How fast you adopt it and how fast you lead the way, that’s really up for the utilities to embrace. But there it’s a change that benefits utilities, because it brings transportation, batteries and solar panels that it’s something that they know of to their front yard. So some other companies are going to come there too, if you don’t lead the way.

Sarah: Right. Yeah. It’s just interesting, like you said, it should be easier for them, but in my years of doing this, it’s not easy, because it’s a change in identity of who they are. And it’s a change in the identity of how they serve their customers, how they make their money. And that is just, it can be very, very challenging for people to embrace that need to become something different. At the end of the day though, this doesn’t sound any different than a lot of the other industries we discuss, which is, what do the customers want? What do the consumers want? If there are going to be more and more electric cars, then yes, you need more charging stations. That doesn’t mean that today you need all charging stations and no gas pumps, but you need to start planning for the future now and figuring out how that transition is going to take place and what that’s going to look like. And it just comes back to being open to meeting the needs of the consumers you make your money from.

Sarah: So if it’s ultimately driven by what do they want and where are they heading, which in this case is incredibly compounded by the environmental impact of these things. So, super, super-interesting.

Enrique: Thank you, Sarah. Absolutely, because at the same time, you do see utilities leading the way. You do see utilities taking all this information right on and actually investing billions of dollars into promoting the citizen to use this clean energy to adapt technology that allows for batteries at homes, at buildings, at commerces. And on the other hand, to collect all this information in a way that allows the utility to plan ahead all the investments they need to do in transmission and distribution to guarantee a normal and high level of quality service, because all this change in way we produce, consume, and commerce power also requires an adaptation of the traditional models of when was the usual way of consuming and producing power in the past. These changes also require investment and also require long-term thinking. And in an industry where five years and 10 years is short-term, because energy industry have investments that when you decide your first investment for a power plant to be built, you know that it’s going to be a five-year buildup project and then a 30-year asset that’s going to be working very hard for you.

Enrique: So we’re taking decisions now for a 35, at least 35 year-period. So five years go by fast in the utility sector that the economic cycle is a long economic cycle. So some of those utilities knowing all this, they’re leading the way, and they’re doing what’s right for the environment, but what’s also right for the pocket book. And that’s why this moment is very important. Right now, you can really have your major, your cake and eat it too. You can have a win-win situation when technology allows you to make a decision that’s good for the environment and good for the pocket book.

Sarah: Yeah. Yeah. It’s really interesting. I want to talk with you a bit after. I’d be interested in relying on your network and maybe having someone on that is leading one of those utilities that is really stepping up and taking the reins in this transformation, because it’d be interesting to just talk about why and how they see things. I mean, to your point, with any disruption there’s companies that just are more adaptable and more willing to innovate, and there’s those that are just more resistant to change and like you said, more in denial. And it’s really interesting to kind of examine the differences there and try and help those who are resisting a bit, understand what the flip-side of that can look like and the opportunity it presents. So really interesting stuff.

Enrique: Well, there’s one comment that I want to show you. When you go back to power generation and you see that the cost of solar generation has gone down by almost 85% in the last 15 years. The technological advances of that is tremendous. And one way that countries have been achieving that technology change to benefit their consumers, to benefit their citizens, is that they have auctions every year that will allow for different technologies to bid, to offer the lowest possible price of power generation for wind and for solar. Mexico did that back in 2016 and 2017, and 2018, with very important outcomes of reaching the lowest price for solar panels and wind farms in the world. Other countries that continue doing those type of standard processes, public, international, transparent, open have led the way into having even access to lower cost technology in their own processes in 2019, 2020, 2021.

Enrique: So what I see is that as years go by and countries offer an important atmosphere for technology to come compete and therefore show the way, and you get the benefits that will impact the citizens for years to come. Those solar farms and wind farms take two to three years to be built. And their service life spans from 25 years to 35 years’ time. So, it’s very beneficial. And of course, we can suggest names of different companies that have led the way in this technology. The U.S. has just announced that they are going to have their first offshore wind farms established in the east coast, something that has happened in Europe for a long time now, but that technology increasing the size of the basis or the length of the rotators have allowed to even generate more energy with the same wind offshore.

Enrique: So that allows for more efficiency, lower costs and so forth. And obviously, there was always be some criticism to every technology power generation, and there’s also always to be open to hear how can we improve technology and improve many things, but the bottom line is that in comparison to hydrocarbons, the possibility to use sun and wind to produce power is just a very important asset within an overall portfolio of power generation. And it’s not going to be the only one as we can continue conversing, there’s also a hydrogen, there’s a conversation about additional nuclear, hydropower is also always very important. So there’s always a source of clean energy that has to be part of an overall conversation. But as of today, clean energy, batteries and electric vehicles seem to be leading the way. And in the conference that I was just recently in Milan, everybody was just talking about it.

Sarah: Yeah. Okay. Well, I think we’ll have some additional conversations we can have in the new year to kind of dig into some more of this, because there’s a lot of interesting aspects to this and I really admire your wisdom and your passion. One other question I wanted to ask you today Enrique is, obviously you’re incredibly experienced and have played many different roles in this space, and you’re obviously very passionate about this industry and this topic. So I love that. And with your experience and your passion now you’re at IFS, you’re heading the energy and utilities business. What makes you excited about coming onboard a software organization to bring your expertise in and take it from a new perspective?

Enrique: Absolutely. Software makes all these changes possible. Behind all these decisions in the long run is software that allows you to make services more efficient for the benefit of the people. And software is a live subject. It changes, it evolves. It requires a lot of feedback, a lot of knowledge, but it grows. So one thing that it attract me to join now this effort, is to be able to have conversations with utilities and to understand what are the problems of these changes? How can software allow them to have the information they require to run the assets that utility has to provide services? How to empower the citizen with software so that they know how much power they’re generating, how much they’re going to be consuming, what they can sell and where, and how to, at what price? On the other hand, you need software to understand how are you going to include the electric vehicles within the ecosystem of a city, a neighborhood or a household?

Enrique: In addition to that, you need software to understand how are you going to transmit all this information that’s going to be produced by the consumption of even more electric appliances in the family household, in industry, in commerce? So all these need software and software that allows you to face change in a more secure way, in a more knowledgeable way. And the conversations that I had in the U.S. with many utilities that are leading the way in these changes is that without software, they would be blind going into this change process. So they need their software with them. They also understand that software is something that needs to be improved and included and brought on up. So I think it’s just fascinating to be out now on the other side of the equation and understand how a service provider of good software helps utilities lead way.

Sarah: Yeah. I mean, when you talk about big of a foundational change, as we’re talking about today. You can’t lead through that without a lot of insight. And that’s the power of the software, the power of the technology is having the information at your fingertips that you need to know how best to meet the needs of the consumers and businesses you serve. So I think it’s really cool. It gives you a chance to be a part of this transformation and in a new and different way than you have thus far.

Enrique: Absolutely. And let me tell you, utilities, although obviously infrastructure is relevant. Utilities is about people. Utilities is about the workers and engineers within a utility that make all this happen. And when I was in the utility in Mexico, I remember to say that a utility is like a referee in a soccer match. If the referee’s good work is for him not to be noticeable, you see the game plays, and there’s no controversy if the referee called a good shot or a bad shot. So then the referee has to be mostly invisible when it does a good job. Utility is the same way. If you arrive home and you turn on your power and you keep on about your business, everything is fine. So the utilities are quite doing a great job when you don’t even think about it, when you can go around in your life.

Enrique: And for that, for the utility to be invisible, is that thousands and millions worldwide of women and men, talented women and men are doing their job right. And what software that helps that is Workforce Management. Workforce Management allows a utility to take care of their workers and allows the workers to take care of the utility, because it allows the job to be done properly, safely and economically for the benefit of all. So that’s an additional way that a software company allows for the world to continue doing their business without anybody noticing that it’s there. And that is the key of it. You have to do your job. And everybody continues to do, to have their own life and power is on when you need it. And that’s the belief of it. Power is on, everybody happy. When the power is not on, it’s like the bad referee, everybody’s talking about the bad referee and nobody wants to talk about the bad thing he did. So I’m glad to be now in a software company that helps utilities and helps the women and men in utilities do their job properly.

Sarah: Yeah. Well, I think it’s great that you’re here. I absolutely loved hearing some of your thoughts and some of your experiences, as I mentioned, this is a space that I have not dove a lot into. So I appreciate you educating me as well as some of our listeners. And I’d love to have you back again and dig into some of the other areas of this and just keep learning from your wisdom and your experiences. So thank you Enrique.

Enrique: Oh, thanks so much, Sarah. And I wish you the best. And to all of you for this end of the year. Have a nice holidays with your family and best wishes for 2022. Let’s make it a very strong year.

Sarah: Absolutely. Thank you. All right. You can learn more by visiting us at futureoffieldservice.com. The Future of Field Service podcast is published in partnership with IFS. You can learn more at ifs.com. As always, thank you for listening.