Sowitec - Company Report

COMPANY REPORT

Company Report Table of Content

4

Spotlight Benefits of Photogrammetric Aerial Surveys in Renewable Projects

5

Analysis Geographic Information Systems and Their Role in EIA

6

View From the Top Alejandra Domínguez | Managing Director | SOWITEC

8

Spotlight Hydraulic Modeling Determines Flood Footprint

9

Analysis Anthropology, Fieldwork Bolster Social Impact Assessments

SPOTLIGHT

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Benefits of Photogrammetric Aerial Surveys in Renewable Projects The renewable energy market is booming but COVID-19 has made it difficult to put boots on the ground. Drone photogrammetry is helping mitigate that hurdle. This approach to collecting data helps companies optimize the layout of wind and solar farms, enables efficient civil engineering and aids in obtaining environmental and social permits.

Photogrammetry is the science of making accurate measurements and models based on photographs.

In combination with applied techniques, photogrammetry offers many solutions when analyzing large territories. SOWITEC, one of the world’s largest developers for renewable energy projects, adds drones into the mix, which makes taking pictures needed to generate data simple, safe and cost-effective. The photographs can then be used to create virtual models and users can implement a software created specifically for infrastructure design to manipulate and alter the environment to gauge the potential impact from their equipment and vice versa.

Through this approach, renewable energy companies are able to conduct a multidisciplinary analysis, identifying environmental factors, studying bodies of water and analyzing human settlements.

Time frames for this method decrease drastically because the project developer no longer depends on the work of human professionals plodding around the area. For renewable energy projects, truly understanding every key factor that could impact the project’s development is crucial. By using Read the complete article More about this company

this innovate method, SOWITEC is able to comply with strict security protocols and ensure high-quality standards in its execution.

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Geographic Information Systems and Their Role in EIA Geographic Information Systems (GIS) have been adapted to different fields of research. In Mexico’s growing renewable energy sector, GIS yields important results related to the environment with its potential identification and mitigation of impact stemming from implementing energy infrastructure and equipment.

Studies such as the Environmental Impact Manifest (MIA) have a significant geographic component, which is mainly answered by the use of GIS. Retrospective and prospective identifiers of the location allow for a comprehensive project impact analysis, in addition to the environmental, social, cultural, economic and political factors that need to be taken into account. Using GIS to generate a dimensional analysis of these elements aids in the process of determining whether an area is suitable for a project and whether or not it is feasible.

The question then becomes how geography plays into the crucial Environmental Impact Assessment (EIA). To arrive at an answer, there needs to be an awareness of where GIS can be useful when creating the MIA. The first area where GIS serves a purpose is during the collection of spatial information. This refers to many environmental factors, including hydrology, range of temperature, the way the land is used, vegetation, communication infrastructure and the location of cities. This type of information is often available and found in a variety of formats, such as local plans, shapefiles and KMZ files. All this data needs to be in the same format before it can be used properly for spatial analysis processes. GIS is an essential tool in this regard because it processes a massive number of formats. It can then transform these into a single useable format, often ESRI shapefiles.

The second area is the creation of specific cartography, necessary for each of the chapters of the MIA study.

Cartography can be presented statically, meaning using traditional printed maps. However, it is also possible to present maps dynamically, through files that can be controlled by platforms such as Google Earth or AutoCAD. With these platforms, users can interact with the data to understand it better. It is important to highlight that people who use this dynamic cartography do not need to be specialized in GIS because it is compatible with other, more basic formats.

The third area involves specific and precise analysis, stemming from various processes such as overlapping, merging, rasterization, extraction and statistics that are used to outline the potential space for the project. If information for social and cultural aspects is available and considered both relevant and reliable, they can be added to the outline of the space as well.

Ultimately, making smart use of GIS allows the user to determine a project’s environmental and social viability. It also facilitates Read the complete article More about this topic

the mapping out of the ecological impact. It is, therefore, a tool that enables effective planning and decision-making, which are essential to the development of energy projects.

VIEW TOP Sowitec | Company Report | 6

from the

Q: What sets SOWITEC apart from other renewable energy developers?

A: SOWITEC has excellent technicians who can analyze everything related to field development, including geographical studies that use advanced drone technology, electrical engineering, environmental studies and anthropological research. What sets SOWITEC apart from the competition is its team’s passion for the work it delivers.

We are a developer company highly recognized for the collaboration that we have had with multinationals such as Santander, ENGIE or Enel. Since we started working in Mexico in 2008, we have always demonstrated our enthusiasm for renewable energy. We are committed and will continue our work in this sector, despite the challenging times it is going through.

Q: How did the company adapt to the challenging times of 2020?

A: Three months into 2020, we all had to adapt by working remotely. SOWITEC has projects in ejidos, where you need to hold assemblies to keep in touch and comply with contractual arrangements. It was difficult to extend payments on time, which was usually done in personal meetings. Interestingly, ejido owners were quite understanding of the situation;

Alejandra Domínguez

nevertheless, SOWITEC makes every effort to fully comply with its agreements and contracts.

As a project developer, we also have a specialized team that

Managing Director | SOWITEC

works in the field. It explores potential development sites, which you cannot do if travel is not possible and there are no places to stay overnight. For this reason, we were not able to achieve our objectives for 2020. Also, the Mexican government also shut its doors due to the pandemic. Entities

Large Projects Hibernate While Small PPA Projects Gain Traction

such as CRE, CENACE, SENER and SEMARNAT did not issue permits during this time. This caused a delay in all of our objectives, since working remotely with them was challenging.

This continued even after they re-opened.

Furthermore, the government has taken on the mission to strengthen PEMEX and CFE, and has initiated various measures toward that goal. These have affected our operations in a major way. For example, generation permits are not easy to obtain at the moment. Even applying for a permit is a challenge, meaning that planning and financing projects is somewhat out of the question.

SEMARNAT took a long time in reopening its offices.

Furthermore, it has federal mandates dictating that it should focus on non-renewable energy projects. As a result, obstacles have piled up for the renewables sector. I consider the pandemic to be an important impediment but we have also seen that the government has taken advantage of the situation to create new regulations that slow down renewable energy development in Mexico. Even after certain government entities opened up, the slowdown continued. Despite the pandemic’s far-reaching effects, we believe the government has had a stronger influence in this crisis.

Q: What is the main issue the company faces when its employees are not able to travel?

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from the

A: A company like SOWITEC often works with boots on the ground and prefers to have direct contact with land owners.

Using wind and radiation maps, we can identify potential sites for good renewable energy projects. Soon after, we travel to the site to identify who the landowners are. Personal, face to face conversations with land owners are crucial because this offers access to the land. Using Zoom or phone calls is not an option because it does not convey trust in the relationship.

This is still a problem because the COVID-19 infection rates remain high in early 2021, which means that people do not want to receive anyone in their home. Until this situation changes radically, we cannot fully establish our operations.

Q: In light of these changes, where does SOWITEC identify the best opportunities for business development?

A: Vestas is a large company with global representation and it has been a part of the SOWITEC Group for a while.

This has helped us to organize ourselves differently in regard to looking at the situation and analyzing projects from a sustainability and financing point of view. We have implemented internal tools to be able to shift toward projects that can be invested in the short term and that quickly yield returns as well.

When we started working with Vestas, our main focus was on long-term auctions and utility-scale projects. Afterward, we started eyeing smaller private projects with PPAs under 100MW. These projects are tailored directly to the needs and demands of our potential clients, mostly located in central Mexico. After the auctions ended, our clients approached us to do projects there, as this is where they needed energy.

We got involved in this area, but soon after the government started to place limitations. Now, we are looking to work ore with Vestas in the shorter term. We make sure that the projects we develop meet criteria that allow us to gain returns in the short to medium term, while still focusing on client needs. We are also hopeful that the long-term energy auctions will return in 2021, which Minister of Energy Rocio Nahle alluded to in 2019. This is where our portfolio is the broadest.

One example of a utility-scale project is our La Araña solar project, which was planned for the third energy auction.

However, the zones were changed during the process, making the project unviable. We decided to keep the project for the fourth auction, which was eventually canceled.

Together with Vestas, SOWITEC has decided to put our large-scale projects in hibernation. It is important to keep projects there because once the auctions are reactivated, they could be very attractive. For this reason, we continue to maintain the project and its land. We also have other projects in hibernation that we hope to develop in the future. The company, however, is not looking to invest in projects that do not yield returns in the short term at the moment.

Read the complete article More about this person More about this company

SOWITEC has also been examining new technologies.

Mexico is rich when it comes to solar and wind resources.

We continue to scout opportunities to diversify our pipeline, despite an uncertain environment in Mexico for renewables.

This situation could still change, however.

SPOTLIGHT

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Hydraulic Modeling Determines Flood Footprint In a wind project, a flood footprint is the marking out of an area where a flood risk is present. A key objective is to estimate this risk, giving developers important information on how to arrange infrastructure to avoid it being endangered. The outline includes perennial rivers and streams, bodies of water and areas where intermittent streams pass through. To determine the flood footprint, you need to know the variables generated by the water runoff.

Here, hydrologic and hydraulic analysis is necessary, which is supported by 2D hydraulic modeling.

There are a variety of programs available to generate these models, depending on the scope of the analysis. For the rainfall-runoff analysis of rural basins, SOWITEC group bases its approach on the Hydrologic Modeling System (HEC-HMS). This was developed by the US Army Corps of Engineers. For 2D hydraulic modeling, open access programs, such as IBER and HEC-RAS, are used. Processing vector data and raster files in a Geographic Information System (GIS) and importing them into the 2D modeling program obtains the hydraulic variables for the determination of the flood footprint.

Each project has a different degree of complexity in the Hydrologic-Hydraulic 2D analysis. The accuracy of the analysis depends on various factors, such has having a Digital Terrain Model (DTM) available. This DTM accurately represents the surface on the site where existing hydraulic infrastructure is placed and displays a correct representation of the site’s surge, the placement of existing hydraulic infrastructure Read the complete article More about this company

and the correct calculation of floodplain regulation, which all enter the polygon and calibration of the site, from data measured in the field.

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Anthropology, Fieldwork Bolster Social Impact Assessments Companies in Mexico’s energy sector tend to underline the importance of sustainability. As a result, they have to pay close attention to how they coexist with the community. Many companies in Mexico have had to deal with controversies. For instance, some neighboring communities claim they have been dispossessed, that they were not consulted properly and that companies are not abiding by formal agreements. Even though companies are legally obliged to carry out a Social Impact Evaluation (EVIS), the reality is that there are few companies that have become socially involved with the population and their neighboring projects. Often, they only prepare an EVIS to comply with procedural requirements.

Social dissatisfaction arises for different reasons. Often, it affects communities whose members feel they have not been taken into consideration by companies. Community members claim when companies present a project, they do so without respecting processes and social codes that pertain to the community.

Why is it important to understand a community? Let us suppose that a company wants to install a wind farm in a community whose religious beliefs find important deities linked to the winds or with ritual specialists known as ‘graniceros’ or ‘tiemperos’ who invoke the winds to promote good harvests. It is probable that the community considers the project to be a negative element toward these cultural elements; in this sense, it is most likely that the wind farm will not be socially accepted. If the same project were installed in a non-indigenous community, whose population has a different religious base and, therefore, has other cultural dynamics and practices than those of indigenous communities, this same project may not be inappropriate at all. Anthropology is key to finding the answer in this case, since it allows us to study the important cultural processes that define each community.

To effectively develop energy projects, thorough field work when establishing the EVIS is key. However, one of the main problems encountered during field work is that the “field researcher” approaches the community as if the project were a show, where the researcher looks for significant social events to happen, rather than analyzing the logic of its community members.

To accurately describe the communities’ social life and identify what social impact a project will have, the researcher needs to continuously analyze three areas of reflection, which constantly interact and overlap during field work. First, the researcher needs to reflect on his position as a member of a different culture than that being studied. Second, a theoretical perspective that can be applied to the object of study needs to be taken into account at all times. And lastly, the researcher needs to reflect on the day-to-day life of the community that is being studied, as this is the main source of knowledge. These three areas of reflection will inherently be present when researchers and communities meet in the field. It creates a process of interaction, distinction and exchange of information. For this reason, field work should Read the complete article More about this topic

be extended and considered as a resocialization of sorts, where it will be necessary to be involved in a new society that includes setbacks and a time constraint.