Ecuador: Energy Resources

Extend network

National electrification rate (2010): 93,53% Urban areas: 94.82% Rural Areas: 89,03%

Energy procedure

National Plan of Electrification 2006-2015 elaborated by the CONELEC.

National Plan of Rural Electrification 2008-2012 elaborated by the CONELEC.

Energy debates

Diversification of the Energy Matrix is being debated by the Ecuadorian government.

Energy sources

Total installed electricity capacity (2010):  4.761,39 MW.

Thermo-electricity: 52,17% Hydro-electricity: 42,37% Wind power: 0,02% Biomass: 1,16% From interconnection with Colombia: 4,28%.

Regulatory roles

The National Energy Council is in charge of energy planning, energy regulation, quality, safety and environmental regulation, competition enforcement, licensing and concession granting.

Competition

Being a public company and by its scope of action, CELEC EP is defined as a strategic public service. Its purpose is the provision of electricity and it must comply with the principles of obligation, generality, consistency, accountability, universality, accessibility, consistency, continuity and quality. The main activities of CELEC EP are as follows:

   The generation, transmission, distribution, marketing, import and export of electric power for which it is empowered to conduct all activities,
   Partnering with individuals or corporations, domestic or foreign, public, mixed or private, to implement projects related to its overall purpose.
   Participate in associations, institutes and international groups dedicated to the development and scientific and technological research in the field of construction, design and operation of electrical engineering.
   And scientific or technological research and development and market processes and systems.

The main purpose of Petroecuador EP is the strategic sector management of non-renewable natural resources for their sustainable use, under the Public Enterprise Law and the Law of Hydrocarbons, for which it will intervene at all stages of the hydrocarbon, under conditions of environmental preservation and respect for the rights of people.

Energy efficiency

The Ministry of Electricity and Renewable Energy develops different projects of energy efficiency, such as the replacement of six million street light halogen bulbs for energy saving ones and the Public Building Energy Efficiency Program. 

Within the Ministry, the Undersecretary of Renewable Energy and Energy Efficiency (SEERE), is the governing authority of efficient energy management and renewable energy development in Ecuadorian territory, and as such, determines policies, strategies and guidelines based on energy sustainability, safety and diversification, and encourages information gathering and knowledge generation, and implementation of efficient and friendly technologies, to mitigate the effects of climate change and to underpin sustainable economic development.

Ongoing programs to promote Energy Efficiency:

   Energy Efficiency National Plan
   Energy Efficiency Promotion Law
   Biofuels Bill
   Pre-feasibility studies of 14 mini hydropower plants (agreements with universities)
   Pre-feasibility studies with national sectional agencies
   Feasibility studies for small hydro. MEER-PROMEC
   Industrial Census on textiles and plastics
   Feasibility study: use of agricultural residues, agro and livestock to produce biogas for generating electricity and heat.
   Feasibility study: combustion of rice husk for the production of thermal or electric energy.
   Energy Efficiency Program in Public Buildings
   Energy Efficiency Project in Industrial Sector
   Light bulbs Savers
   Hydropower Project Chorrillos
   Hydroelectric project construction: Mira
   Santa Cruz wind project: Baltra
   Knowledge Transfer Agreement with the German Government: DED
   Campaign to promote EE projects (suitable for each project)
   Validation of the Energy Education Curriculum

Capacity concerns

Supply shortages during the October-March dry season.

Government agencies

The CIE (Comisión de Investigación Energética) is a private, not-for-profit company, created by Agreement No. 374 with Ecuador’s Ministry of Energy and Mines, dedicated to energy and environmental research and education. They conduct scientific research and develop renewable energy pilot projects - in cooperation with the education sector - that have long-term benefits for preserving our shared environment. CIE's projects are focused on improving the use of all forms of clean energy in Ecuador, such as the Huascachaca-Yulug windmill power plant project, the Oyacachi Hydroelectric project or the small hydroelectric generator test facilities.

Energy regulation role

The Centro Nacional de Control de Energía, Corporación CENACE is in charge of both system and market operation. It began its operations in February 1999 as a non-profit organization, with private ownership.  Its board is formed by a representative of the President and by representatives of the generators, the transmission company, the distributors, the marketers and the large consumers. It regulates purchase; sale of electricity in wholesale markets and retailers to meet the demands of energy, especially at peak hours.

Ownership

Electricity market On January 14, 2010, through Executive Order 220, the Empresa Pública Estratégica Corporación Eléctrica del Ecuador CELEC EP was created. It is comprised by three hydroelectric generation companies: Hidronación, Hidropaute, and Hidroagoyán; by three thermal generation companies, Termopichincha, Termoesmeraldas and Electroguayas, and by the transmitting company TRANSELECTRIC, becoming the single company responsible for power generation and transmission nationwide.

CELEC EP is comprised of seven strategic business units, which are tasked to generate and transmit electricity at lower cost, reliable and continuous quality.

CELEC EP through its Transelectric Business Unit is responsible for operating the National Transmission System; its primary purpose is the transport of electricity, ensuring open access to transmission networks to the Wholesale Electricity Market, consisting of generators, distributors and large consumers.

In April 2011, the Directorio del Consejo Nacional de Electricidad, CONELEC, approved regulations to allow the Government to delegate to the private sector project development in the electricity sector (on basis of exceptions), and encourages development of alternative energy sources.  The purpose is to increase electricity provision to meet national demand as part of the Electrification Master Plan (Plan Maestro de Electrificación).

Liquid fuels market On April 6, 2010, by Executive Order No. 315 the Public Company of Hydrocarbons of Ecuador, Petroecuador EP was created, with its own assets and budgetary, financial, economic and administrative autonomy.

Degree of independence

The National Energy Council Board is composed of 6 members appointed by the government and public sectors. The president and the vice president of the National Energy Council are appointed by the President.

Energy debates

Plan de Acción de Energía Sostenible para Ecuador (PAES) financed by the Inter-American Development Bank and the Ecuadorian Government www.idbdocs.iadb.org/wsdocs/getdocuments.aspx?docnum=1591232.

Energy framework

Government initiatives to promote the use of renewable energy include:

- 631 small-scale photovoltaic projects (80 to 3315 watts) that are part of the decentralized rural electrification program. Between 2007 and 2011, the EURO-SOLAR Programme, supported by the EU, will provide access to solar energy in 91 rural villages previously deprived of electrification

- Development and use of bio-fuels based on sugar cane bagasse and other agricultural wastes.

- Use and evaluation of solar, wind and hybrid energy systems (Diesel-Solar or Diesel-Wind) to supply electricity in Floreana, Galápagos, Isabela and Santa Cruz Islands.

Reliance

While Ecuador has a net electricity surplus, it often faces supply shortages during the October-March dry season, when hydroelectricity output declines. To make up for these shortfalls, Ecuador imports electricity from Colombia.

In 2010, Ecuador imported from Colombia 872,9 GWh which represented 4.28% of the total generated capacity.

The transmission line Machala-Zorritos with Peru, capable of supplying 85 MW, was completed in 2004, but has only been brought into service on occasion in order to deal with blackouts in southern Ecuador.

Role of the government

In July 2007, the Ministry of Energy and Mines was divided into the Ministry of Mines and Hydrocarbons, in charge of the policy for hydrocarbons, and the Ministry of Electricity and Renewable Energy, responsible for implementing the electrical policy adopted by the President of the Republic.

Minsitry of Electricity and Renewable Energy (Ministerio de Electricidad y Energía Renovable) http://www.mer.gob.ec/

The sector also includes the Solidarity Fund, FISE, which is responsible for the management of electricity companies that are state-owned. 

Another institution is the National Company of Electricity Transmission, TRANSELECTRIC S.A., which is responsible for the phase power transmission through National Interconnected System (NIC).

Regulatory framework

Ecuador’s new constitution, approved in 2008, includes a number of articles that add environmental protections and make resource extraction in national parks like Yasuni more difficult to pursue. The most groundbreaking new protections are the articles on the “Rights of Nature”.

Regulatory barriers

N/A

Energy regulator

The Consejo Nacional de Electricidad (CONELEC) is the government agency in charge of regulation and overseeing the electricity sector created in October 1996. http://www.conelec.gov.ec/

Renewable energy

Hydropower The Ecuadorian government is developing the program Matriz Energética para 2020 (2020 Power Grid) that intends to increase the use of hydroelectric energy from the current 50% to 80% in 2020, diminishing the dependence on fossil fuels.  In this context, the development of 13 small-scale hydroelectric plants in rural areas of the country is also under study. In 2011 Ecuador had an actual national power (potencia efectiva nacional) in Hydropower of 2,215.6 MW.

Solar energy Radiation levels from 3.8 to 6.0 kWh/m2/day (2,000 hours/year of sunlight). In 2011, Ecuador had an actual national power (potencia efectiva nacional) for Solar energy of 0.08 MW

Wind energy Exploitable winds are located in the mountainous areas and sea breezes. There are winds from 2.m/s to 8.0 m/s in the Andes, and greater than 3.5 m/s on the coast. In 2011, Ecuador had a national wind power capacity of 2.4MW.

Geothermal energy Generating potential is estimated at 4,700 GWh, equivalent to 40% of annual consumption. In 2011, Ecuador had a national geothermal power capacity of 1,101.0 MW

Although Ecuador reports several initiatives on renewable energies other than hydroelectric energy, power generation from the renewable sources does not contribute significantly to the total installed capacity.