Today, starting at 2:00 p.m., at the facilities of Empresa Eléctrica Quito, bids will be announced from at least seven companies interested in supplying electricity to the country, via barges or alternatives on land with fuel oil. This is the first result of the declaration of a state of emergency, which was made on October 18 by the Ministry of Energy and Mining through ministerial agreement 2023-0022 AM.

According to sources from the Ministry, there are four objectives of the regulation which, in general, aims to speed up the contracting processes for additional electricity production: faster procedures will be implemented, but there will be bidding. That is, at a time when there is a dry period in the country, which generates less hydropower production, and without sufficient thermal energy production, we had to resort to new outlets. The one we are using now is buying electricity from Colombia, which is extremely expensive.

The government declares a state of emergency in the power sector in order to speed up energy contracting processes

According to the Ministry, first of all, the process that will be carried out this afternoon was convened by the distribution companies that will be the buyers of this energy. There are nine distribution companies and they have taken the lead in this process: Eléctrica Quito, Cnel, Celec and Empresa Centro Sur de Cuenca. Previously, as announced by Celecan manager Gonzalo Uquillas, certain approaches were made. In that sense, he expected it to be propulsion ships (boats) or containers on land. “Čelec would conduct a tender for the supply of electricity of 300 MW for one year, with the possibility of extension or renewal. I believe it will take five years, since the Santiago and Cardenillo hydroelectric plants will be installed in five years, and the demand is increasing by 10% every year. They would be located near Pascuales, Exclusas, Trinitaria and Salitral. “This alternative costs $200 million,” he mentioned in this regard.

The money for the contract will be delivered by the distributors themselves who have the means to do so.

Second, the decree empowers Celec, which is the parent company of Transelectrica, so that if complementary works are required in the event that the generator ship option is chosen, the onshore interconnection can be quickly made. In this sense, Transeletric also benefits from the urgent execution of the fast contracting of these works.

More specifically, Article 2 of the ministerial agreement stipulates that the strategic public company Corporación Eléctrica del Ecuador Celec EP, through the business unit Celec EP-Transelectric, through the declaration of a state of emergency, shall carry out the necessary actions for the supply, construction and commissioning of the interconnection system for inclusion new additional production of electricity.

The decree states that these solutions can be connected to the National Transmission System and/or to the sub-transmission systems of distribution companies, for which urgent contracting procedures for the procurement, construction and commissioning of the interconnection system will be carried out.

It also indicates that electricity distributors must coordinate actions with Celec Transelectric and, if necessary, allow connection to their facilities, in order to guarantee the contribution of electricity from the emerging additional generation.

The Ministry further explained that the fact of this energy contracting will not produce any impact on the price for citizens or on state subsidies.

Use of Campo Amistad facilities is excluded

In the meantime, the third objective relates to the contracting of imported gas. Article 4 of the ministerial agreement stipulates that Celec, through the business unit Celec EP- Termogás Machala, through the declaration of a state of emergency, implements actions for the acquisition, installation and commissioning of infrastructure that enables connection to the supply of natural gas, which will be delivered by public or private companies that provide the resource, which will enable Termogas Machala Central to operate at maximum capacity.

In this regard, the Ministry states that the option of a ship that would arrive with flexible hoses for a direct connection to Termogás Machala will be selected. In this way, the possibility of using the Campo Amistad facilities is excluded, which was an issue that needed to be defined. Ministry sources reported that the international expert delayed the report and as a result Petroecuador was instructed to continue the process with the ship and flexible hoses.

The competition for Campo Amistad has been postponed again, now proposals will be submitted until November 6

The decision came exactly when one of the companies interested in the Campo Amistad concession, in order to improve national gas production, requested a new extension until it is known whether the field’s infrastructure will be used or not, as this has reduced interest. Even Petroecuador just announced that the Campo Amistad schedule is being extended yet again.

The fourth goal of the contract is to enable private companies that have inactive production to sell into the interconnected system. It is not known how much it could represent.