Ecuador’s Energy Crisis: What’s Next as the 2025 Elections Approach?
Ecuador has endured a severe energy crisis, with power outages lasting up to 14 hours a day over the past four months. While power cuts for residential consumers ceased on December 20, the industrial sector will see relief starting January 1. However, experts claim that the underlying issues remain unresolved, posing a significant challenge for the next government, which will take office in May after the February elections.
The Root of the Crisis: Infrastructure and Higher Demand
Ecuador’s daily energy demand of 4,500 megawatts relies heavily on hydroelectric plants. Severe droughts, like the one experienced this year, drastically reduce energy production. Experts highlight that outdated infrastructure and lack of maintenance have compounded the crisis.
Veronica Íñiguez, a professor at the Technical University of Loja, stresses the need for immediate, medium-term, and long-term solutions. She advocates upgrading the thermal power sector, which currently serves as the only backup during such shortages.
Santiago Ribadeneira, former manager of Hidroagoyán, emphasizes the urgency of completing abandoned projects. He suggests adding 1,500 megawatts of thermal power using steam and 2,000 megawatts of hydroelectric power, alongside an annual average of 400 megawatts from new projects. Each project would take around five years to implement.
A Systemic Issue, Not Just a Drought
Meteorological data from the Copernicus Climate Change Service reveals a decline in rainfall in southern Ecuador since 2019, affecting the Paute hydroelectric plant. While government officials blame the worst drought in 60 years, experts argue the problem runs deeper, pointing to systemic flaws and neglected maintenance.
Private Sector Involvement: A Key to Long-Term Stability
Many experts advocate for ending Ecuador’s state monopoly on electricity generation to encourage private sector participation. Recent regulatory updates increased the cap on private energy generation from 10 megawatts to 100 megawatts. Substantial legal and fiscal reforms are needed to attract meaningful investment.
Jaime Carrera, president of the Fiscal Policy Observatory, highlights that fostering investor confidence requires a legal framework that ensures fair returns. Without these changes, energy solutions will remain a medium- to long-term goal.
What’s Next?
Expect new scheduled blackouts in at least 2025 while the new government has to take immediate fixes, structural reforms, and substantial investments.
Source: The Milford Mirror.