Innovative optimization capabilities help Mexico’s National Center for Energy Control improve efficiency and mitigate flood risks

FICO (NYSE: FICO):

Highlights:

• PSR uses FICO® Platform Enterprise Optimization capabilities to help improve energy production and water resource management
• CENACE, Mexico’s National Center for Energy Control, adopts PSR’s tools to optimize the country’s power system operations
• Implementation results in over US$300 million in savings in 2022 and enhanced flood management in Tabasco
• PSR won the 2024 FICO® Decision Award for ESG Champion

PSR, a global provider of analytical solutions for the energy sector, has significantly enhanced the operation of Mexico’s power and water systems by leveraging FICO® Platform Enterprise Optimization capabilities. Mexico’s Centro Nacional de Control de Energía (CENACE), responsible for coordinating and operating the national power system, has used these advanced tools since 2021 to optimize energy production and improve water resource management, leading to substantial economic and environmental benefits.

The successful implementation has not only mitigated floods in places like Tabasco, benefiting the 1 million residents of the region, but also saved the Mexican government a remarkable US$300 million in savings in 2022 alone.

More information: https://www.fico.com/en/platform/enterprise-optimization

Watch PSR tell their story on video

“Optimizing the storage levels in hydroelectric plant reservoirs in uncertain conditions is crucial for balancing water use between energy production and consumption needs, while adhering to environmental constraints and preventing floods,” said Raphael Chabar, executive director of optimization and analytics at PSR. “The contribution of FICO Platform is essential, as it serves as the central resolution engine that streamlines decision-making and ensures optimal results swiftly.”

Transforming Energy and Water Management with Advanced Optimization

CENACE, the official entity tasked with the operation of Mexico's power system, adopted PSR’s computational tools to handle multiple sources of uncertainties — such as inflows, renewable energy production, energy demand, and fuel prices. By utilizing a probabilistic approach powered by FICO Platform, CENACE has optimized the management of hydroelectric reservoirs, balancing energy production with flood prevention efforts.

Before adopting FICO Platform, CENACE's planning relied on deterministic optimization, which posed significant risks when future events deviated from predictions. This conservative approach often led to excessive water accumulation, exacerbating flood impacts during heavy rains. The shift to an optimization approach based on probabilistic and statistical methodologies marked a significant improvement in decision-making and risk management, resulting in a more robust national infrastructure.

“Modeling the planning process requires considering a long horizon of uncertainty scenarios, with multiple stages spanning years, in monthly or weekly resolutions, and each energy generator having an individualized representation, which is tremendously complex,” said Chabar.

A Solution Where Everything Flows as it Should

Thanks to PSR’s cutting-edge optimization approach enabled by FICO Platform, CENACE has achieved more accurate operational and risk assessment analyses, significantly improving energy and water security. In the Tabasco region, proper management of water reservoirs is crucial for flood mitigation, directly benefiting around 1 million residents. Additionally, Mexico's efficient management of its electrical grid supports the energy transition and reduces energy dependence; natural gas imports for electricity generation decreased by 4% in 2022 compared to the previous year.

“The success of this project is evident in the stable flow of the Usumacinta and Grijalva rivers, which now operate within their natural parameters," said Mario Veiga Pereira, founder of PSR. “By avoiding excessive water accumulation, we have mitigated flood risks and ensured a more reliable energy supply. This balance not only safeguards the environment but also enhances the quality of life for the people in Tabasco, something we are really proud of.”

“PSR’s innovative application of FICO Platform has set a new benchmark in energy and water resource management,” said Nikhil Behl, EVP of software at FICO. “Their ability to optimize complex systems to plan for uncertainty not only saves costs but also ensures environmental safety, showcasing the power of advanced analytics in achieving sustainable outcomes.”

For its achievements, PSR won the 2024 FICO® Decision Award for ESG Champion.

“What can be more important that managing water, the lifeblood of the planet?” said Eric Kavanagh, CEO of Bloor Group, host of InsideAnalysis, and one of the FICO Decision Awards judges. “This initiative demonstrates how companies can solve incredibly complex problems using advanced tools to deliver outcomes that impact the lives of millions of people.”

To see the full list of 2024 FICO Decisions Awards winners, check out: https://www.fico.com/en/decisionsawards.

About PSR

PSR is a global provider of analytical solutions for the energy sector, offering innovative consultancy services and specialized power systems planning software. With products applied in over 70 countries, PSR contributes to the research and development of tools that ensure reliable, cost-effective power system operations and support decarbonization efforts.

About the FICO® Decisions Awards

The FICO Decisions Awards recognize organisations that are achieving remarkable success using FICO solutions. A panel of independent judges with deep industry expertise evaluates nominations based upon measurable improvement in key metrics; demonstrated use of best practices; project scale, depth and breadth; and innovative uses of technology. The 2024 judges are:

• Andrew Birmingham, editor, Mi3
• Eric Kavanagh, CEO Bloor Group and host, InsideAnalysis
• Elizabeth Lumley, deputy editor, The Banker
• Paul Mah, senior editor, CDO Trends
• Laura Martins, editor, IT Forum
• Paul Robinson, VP credit management at Canadian Tire Bank (previous winner)
• Shiv Sehgal, EVP audience analytics at RSG Media (previous winner)
• Nick Vitchev, director at Chartis

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 4 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 other countries, improving risk management, credit access and transparency.

Learn more at www.fico.com.

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