On October 27th, after fourteen years, Ecuador again experienced the nightmare of power outages, which affect productivity, limit the vital activities of the country and disrupt the routine of citizens. According to the Government’s statements, the rationalization of electricity could last at least a month and a half, until mid-December, but several doubts remain: how did this situation come about, can something be done differently, can it be held responsible?

According to analysts, although it is true that there is a severe drought and that Colombia cannot sell energy to Ecuador, the real problems stem from the statist model that does not guarantee investment, but also from the excessive, heavy and flawed contracts that are implemented … they did in the belt; and, of course, because of the lack of action and mismanagement by the governments that followed: those of Lenín Moreno and those of Guillermo Lasso. It was a fatal cocktail that led to the situation in which the country finds itself.

Alberto Acosta Burneo, editor Weekly analysis, explained that one of the reasons for the repeated blackouts is that production capacity has not grown since 2019. For Acosta Burne, the fundamental problem is the statist model of production. This is based on state investment; However, when the state does not have the resources, and therefore does not invest, then the model collapses and that is what happened. He explains that the public investment model is not sustainable because the funds for investment depend on the price of crude oil, and when it falls, it falls.

“The statist model is irrational, because it is equivalent to flying a plane with one engine off,” he says, explaining that in matters of investment, the state should have the engines of public investments turned on, but mostly of private ones. investment. Unfortunately, he says, private investments have not arrived in the country because the market is regulated by the state and subject to cross and non-transparent tariffs.

In addition, important public investments in production were made during the Correato, but they showed constructive deficiencies. For example, two buttons. “Several weeks ago, Sopladora was put into operation, which was undergoing maintenance because the Chinese company in charge of its construction used low-quality materials, which eventually affected two turbines,” he says. In the case of the Coca Codo Sinclair plant, he explains, it was oversized; In addition to faults in cracks and dividers, it was built too big in relation to the amount of available water. In short, many resources have been consumed and other production possibilities have not been built. Most of the hydropower plants are located on the eastern wing, but more options would be needed in the western sector, to avoid the effect of low water.

Juan Saavedra Mera, an expert on energy issues, recalls that there are several projects that cost the state millions of dollars and were included in the master plan, but were not put into operation. For the expert, there was no consistency between planning and execution, but in addition the regulations for public procurement are too cumbersome and slow; He also believes that there was poor management of infrastructure planning and execution. “There is a total of 1,300 MW in projects that were due to start operating before 2023 and this would solve the current shortage situation.” Among them are:

The project called Termogás Machala Combined Cycle, whose construction contract was signed on July 15, 2013. It was supposed to be operational in December 2015. Although this plant produces energy, it is also true that it is precisely part of the combined cycle that is paralyzed ” and their sensitive equipment is in bad shape condition due to corrosion and time spent outdoors.” The contract price of the deal, including the transfer, was $230 million, he says.

The commissioning of the Toachi Pilatón hydropower plant with a capacity of 254.4 MW was also planned, but this was not fulfilled. The contract for electromechanical works was signed on October 25, 2010 with the Russian Intera, and it was supposed to come into operation in three years and eight months, i.e. in 2014. Recall that after terminating the contract with the contractor on March 22, 2017, due to breach of contract, Celec re-contracted with the same subcontractor and there are again problems with the installation of the 204 MW Alluriquín Central. “There is no defined date for the completion of this work,” he says.

Commissioning of the 500 MW Renewable Energy Block (includes El Aromo and Villonaco II and III) is planned for 2022. In the current reschedule, the project costs $875 million and is thought to be operational in the fourth quarter of 2024.

In 2023, a 400 MW combined cycle project (another thermogas) was expected to be operational with a cost of $600 million. Saavedra assures that this tender process, which included investment, construction and operation, began three years ago, but its location was not defined and the choice of location (LPG Monteverde Luka or Posorja) was left to the bidder, and the investor was asked to assume the risks of gas supply. The model was not attractive. Its work is now planned for 2026.

In addition, renovation plans for the thermal power plant had to be implemented, but they did not fully work due to several factors:

On the day when this Government had to announce the coming of the breakup, it assured that among the measures it had taken was the imminent commissioning of Termoesmeraldas 1 and 2, which would enable the availability of an additional 170 MW. In addition, a tender for the procurement of natural gas will be announced, which could make this energy source available in mid-December. Previously, the purchase of 32 boiler engines with a power of 54 MW was ordered. The largest purchase of new energy will be through electricity distributors, who will purchase 465 MW in six months through barges or land solutions.

On Friday, President Guillermo Lasso announced a new administration that will once again ask Colombia to facilitate the sale of energy to the country. The ruling led to Colombia pledging to sell more thermal energy to Ecuador. In addition, Peru has also agreed to and is awaiting negotiations with Ecuadorian private entrepreneurs so that they can provide more energy. That way, there will be no power outages this Sunday; but will resume on Monday.

In this Government, the contract on the Renewable Energy Sources Block was signed; However, the Campo Amistad concession was delayed and no decision was made in time to import gas from outside Campo Amistad, despite the fact that there were technical reports indicating that it could not be done that way. Nor has the green light been given to capture associated gas in the Amazon.