This Monday, October 30, energy rationalization across the country has been reduced by about 50% compared to the first three days of the measure that began on Thursday, the 26th of this month. There were no power outages on Sunday, October 29. The day of no cuts and the halving from Monday is in response to energy starting to flow in from Colombia, which has pledged to sell 450 MW to Ecuador, and a recovery in national power generation, according to the Ministry of Energy and Mines.

However, the electrical problem is not for a week, a month or a year, according to the commercial sector, one of the hardest hit by this measure, because according to the calculations of the Chamber of Commerce of Quito (CCQ), every hour without sales represents 18 million dollars in losses for the sector. Meanwhile, Juan Carlos Díaz Granados, executive president of the Chamber of Commerce of Guayaquil (CCG), assured that the problems of power generation in Ecuador have been known for four years and pointed out that the lack of new generation and insufficient maintenance of hydroelectric and thermal power plants were under the control of the public sector.

The business sector recognizes that the import of energy products was necessary, but warns that it is not the final solution to the electricity crisis

“The neglect of the public sector to maintain the hydroelectric and thermal plants was an act of negligence,” criticized Díaz Granados during a radio interview this Monday, October 30.

He also revealed that insufficient energy capacity even affected the attractiveness of investments in Ecuador, stating that “many investments wanted to come and invest hundreds of millions of dollars in various activities, but they could not because there was not enough energy capacity to supply these new investments.”

Foreign direct investment fell 87% in the first half of 2023

What Díaz Granados said is justified by the latest figures from the Central Bank of Ecuador (BCE), which reflect an 87% drop in foreign direct investment (FDI) until the first half of 2023, when Ecuador attracted 106.6 million dollars compared to 811.1 million dollars registered in the same period in 2022.

The two branches that fell the most were construction (-1.5 million dollars) and manufacturing industry (-1.2 million dollars), according to the ECB report.

In the meantime, the executive director of CCG indicated that the union proposes to reform the legislation and the Constitution in order to abolish the public monopoly on the production of electricity. This request was addressed to the new government of President-elect Daniel Noboa. “The president-elect has 18 months in office and has to focus on a few things and do them well. One of them is the promotion of legislative and constitutional reform to remove the public monopoly on electricity generation,” said Díaz Granados.

Manufacturing sector: A two-week strike is equivalent to leaving Ecuador without electricity between 3 and 4 hours a day for more than a month

This requirement is also part of the list of requirements proposed by the Chamber of Industry and Production (CIP) and the CCQ. The unions are asking for self-generation to be granted no limits and for regulations to be changed so that companies can generate more than 1MW, among other demands.

Meanwhile, President Guillermo Lasso announced last Saturday that businessmen from Quito and Guayaquil, who own thermal power plants, will contribute 100 MW.

For Albert Acosta Burne, Editor Weekly analysisthe problem of power outages does not stem from the dry season or increased demand, which are the arguments the authorities mentioned when announcing last week’s blackouts, but from statist legislation that does not create a competitive or attractive electricity market for investment.

“Public investment can be when the country has an abundance of resources, when the price of oil is skyrocketing, but when prices fall, these investments disappear, as happened in Ecuador since 2019, there has been no significant increase in installed capacity for electricity generation,” he lamented. analyst. He assured that a competitive law that encourages investment must be made.

Uncertainty about the price of energy in Peru and Colombia

Meanwhile, there is concern in the business sector about the price of energy (450 MW) that President Lasso managed with his counterpart Gustavo Petro last Saturday in Bogota. Currently, Colombia supplies Ecuador with thermal energy at quite high prices, which reached up to 57 cents per kilowatt hour. 50 MW will come from Peru, the president added.

Colombia will almost double the delivery of thermoelectric energy to Ecuador, following Guillermo Lasso’s visit to Gustavo Petro

“We don’t know the real price Ecuadorians will pay for energy from Colombia and Peru,” Díaz Granados said.