The Economic Development Commission of the National Assembly has begun the process of an emergency law on energy competitiveness sent by the executive branch, which for the Minister of Energy and Mining, Andrea Arrobo, is the road of no return and that the regulations seek to ensure that there is never a return to pass through the time of blackout.

Arrobo was the first authority in the sector to appear before the legislative table who started by pointing out that after a month of administration it was confirmed that the government of Daniel Noboa got the electricity sector in intensive care, without planning, with four-hour rationing and they never heeded the warnings which were issued in the technical area from January 2022, and that the needs of the power sector are underestimated.

The qualified emergency bill on energy competitiveness and Koreanism is triggering its critics

Kathya Delgado, director of the Agency for Regulation and Control of Energy and Non-Renewable Natural Resources, joined the virtual session of the committee; Raúl Urgiles, from the Electric Corporation of Ecuador (Celec); Javier Guevara, representative of the National Electricity Operator (Cenace); Rubén Benítez, Executive President of Centro Sur; and Augusto Guerrero of Riobamba Electrical Company.

The officials explained the situation in the electric power sector and emphasized the importance of urgent project approval and the need for private capital to participate in new projects.

In her first presentation, Minister Arrobo referred to the purchase of energy from Colombia, which she said costs $0.64 per kilowatt hour because the production is based on diesel, but that the government of Nobo reached negotiations to change the source of production, which reduced it to 0 .28 USD cents, and from December 26 the price is 0.13 USD per kilowatt hour. And that the energy saving action, carried out in the past weeks, achieved savings of 4% of daily electricity consumption.

Analysis of the law

In the picture, the Minister of Energy and Mining, Andrea Arrobo, during her presentation via telematics before the Commission for Economic Development, about the urgent law on energy competitiveness. Kindness

At the beginning of the analysis of the project, the Minister of Energy pointed out that this law is the cornerstone of the country’s energy transformation and that “this law is a path of no return for the training and strengthening of the national energy system, to which we will never return. going through a period of unconsciousness.”

The concern of members of the assembly of the Citizen Revolution movement and independents is focused on the proposal that, in an exceptional way, private capital companies, participation in the activities of the public electricity service and public lighting service, which could be unconstitutional, this political group believes.

The branch minister clarified that the law will not immediately solve the current crisis, but will lay the foundations for lasting changeeliminating dependence on energy imports and dependence on climatic conditions, taking into account that in the next two months there will be an energy crisis, because the dry period has not ended.

He thanked the industrial sector for the “shoulder they carried” through their self-production and awareness campaigns, as well as the openness they gave to technological changes in order not to self-produce only from diesel, but to implement innovation processes..

The Law on Energy Competitiveness will optimize the management of public resources and attract foreign investment, since the state does not have the resources to undertake the level of investment that the sector needs, nor the time to do so, he warned.

The official showed a list of 19 hydropower plants with a capacity of over 4 megawatts and an investment of more than 5 billion dollars by 2032; In wind energy, there are five projects identified with a private company; four photovoltaic projects; 1 geothermal project that can be expanded as a binational project; and seven thermoelectric projects that generate base energy. About 10 billion dollars are needed for this type of project, and the state is not capable, he emphasized.

Andrea Arrobo warned in her presentation that being against the law proposed in the emergency project, which attracts investors to use energy resources, does not allow the development of the country, because an umbrella is needed to protect the legal stability of new investments.

The management of the Ministry of Energy said that the creation of a fund for energy efficiency, because it will provide the necessary funds for initiatives aimed at saving energy with the participation of multilaterals such as the IDB, CAF and the World Bank, which will officials, are interested in better management of demand.

In order to achieve this, campaigns and changes in energy consumption will be implemented at the national level; first, that new generations come with consistency in their vision of energy use and additionally, that those who do not have access to energy replacement in certain inefficient devices, can be solved with international and national support; for example, replacing inefficient heaters, replacing air conditioners, refrigerators; Well, there are sectors that haven’t been able to change their electrical appliances for 30 or 40 years, and they need to be able to make those changes in their homes to reduce energy consumption.

Tax credits

In her presentation, the Minister of Energy explained the tax breaks for clients who install their own production systems and said that we must use the openness of the private sector to enter into our own production, therefore we need regulations that give them legal certainty, and this is complemented by the new law on economic efficiency.

At the same time, he said that the project will release new investments in conventional renewable energy sources and green hydrogen for ten years, there will be a reduction in income tax due to the reduction or savings on annual consumption bills.

When it comes to the forgiveness of interest for public service, the housing sector benefits the most from this rule, pointed out Arrobo, who revealed that the total debt due to non-payment of the energy service amounts to 519 million dollars, and that 79 million dollars of interest will be forgiven, which is true high value, but there will be much more liquidity management of companies that will improve their financial situation.

In the end, he emphasized that it is necessary to promote an ambitious plan to expand energy production and transmission and to focus on the country’s energy demand. Passing this law is a path of no return, there is no going back, and this is thinking about the country, it is a vision for the future and it guarantees the attraction of international investments that will alleviate both the energy crisis and the fiscal crisis. that Ecuador lives.

Privatization of the sector

Legislator Blasco Luna (RC), He asked for more details about the 19 hydroelectric power plants that would be ready for foreign investment, but also for the forgiveness of fines for non-payment of electric service. He said that they agree with the residential sector, but he made remarks that the industrial sector should be forgiven. , because in their opinion they already benefited from the amnesty in the previous law on economic efficiency.

Viviana Veloz also from RC He asked for a greater review of the regulations that are intended to be applied because already in 2019 there was a reform of the electricity industry, and in addition he asked for explanations about the forgiveness of debts arising in the project, which in his He said that the opinion will only be for economic groups that make part of the delayed portfolio.

Another concern of the Correísta sector is related to the exception that is intended to be implemented in this standard by delegating private capital companies in the activity of public electricity and public lighting services. That would be unconstitutional, Veloz warned, because, according to her, what is stated in Article 316 of the Constitution could be violated.

“There is a certain concern here because we have always said that we do not agree with the privatization of social assets,” he repeated.

Lawmaker Pedro Velasco (Avanza), He also said that at the national level there is concern about the privatization of the electric power sector, and he asked for clarification in this regard, although he believes that the urgent project is not directed in that direction.

Minister Andrea Arrobo, responding to this concern of members of the assembly He stated that delegation to the private sector is determined to be exceptional and that there is no question of privatization at any time, and it is a matter of reforming the organic law of the public electric power service.

Arrobo insisted before the table that the issue should not be misrepresented, as it is the interaction of the public sector with the private sector through various alternatives such as strategic alliances to be able to support electricity generation at the country level; There was never any talk of privatization.

The official reiterated that if there is no support for this proposal, the country will not be able to face the next dry season and the blackouts will continue. If the private sector is interested in investing and if the state has the resources; So why not do it, he asked.