A look at where hydro fits in Ecuador president-elect’s energy roadmap

Ecuador map

Energy policy in Ecuador is expected to maintain its current course under the administration of president-elect Guillermo Lasso, who is scheduled to begin his four-year term on May 24.

According to BNamericas, Ecuador’s energy sector underwent an about-face with current President Lenà­n Moreno in a bid to move away from former president Rafael Correa’s state-driven spending push to direct private investment.

Moreno’s first action on this front was the return of production sharing contracts, followed by the Intracampos upstream hydrocarbons round, and, more recently, the launch of processes to transfer management of the Esmeraldas oil refinery to the private sector and renewable energy concessions.

With regard to hydropower, a potential sector opportunity includes the concessions for the 600-MW Cardenillo hydro plant. Cardenillo, to be built on the Paute River by Celec, is anticipated to be online in 2026.

Other potential opportunities include a new Intracampos round, a call for Suroriente acreage, the operation of the Sacha field, the overhaul of the Monteverde LPG terminal, 200 MW of renewable energy, 400 MW of natural gas-fired capacity and the Nororiental transmission system.

“The participation scheme is the worldwide successful practice that attracts billions in private investment… we will be an investment magnet,” Lasso’s work plan says.

Among the president-elect’s planned actions is the creation of a public-private partnership (PPP) committee to analyze new projects and attract investment, as well as reform of the PPP incentives framework to expedite the signing of such contracts.

The former banker calls for renewed investment impetus to break “stagnant” oil production. “Ecuador can increase its oil production because it has the reserves to do so. At present, we have only explored half of eastern Ecuador. According to official estimates, the southeast is home to about 8 billion barrels of oil at an average depth of 10,000 to 15,000f with commercially exploitable oil,” highlights the roadmap.

The work plan also envisions greater hydropower use, arguing that only half of Ecuador’s potential from the energy source has been tapped, as well as the development of wind and solar projects, which would complement hydro generation during droughts.

“With the same urgency, we must work on a new fairer and more competitive electricity tariff. It is essential to establish cheaper electricity rates for owners of small commercial and artisan businesses located in residential areas, as well as for the productive sector,” the plan says.

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