The measure comes after Ecuador's Minister of Energy and Mines, Goncalves, indicated that instead of "the drought period starting in September, the drought has already begun" and that they are already working on actions to address the situation.
The Ministry of Energy and Mines of Ecuador, through Minister Antonio Goncalves, declared a state of emergency in the national electricity sector this Thursday, August 15. It did so through Ministerial Agreement No. MEM-MEM-2024-0027-AM. This agreement was issued based on Executive Decree 355, which provides for urgent measures at the first signs of drought.
The agreement states that the purpose of this declaration is to safeguard the continuity of the provision of public electricity services.
This announcement comes after Minister Goncalves indicated that instead of “the drought starting in September, the drought has already started” and that they are already working on actions to deal with the situation. After these statements, the President of the Republic, Daniel Noboa, ordered the Ministry of Energy and Mines to coordinate and execute all necessary actions with the National Electricity Operator (Cenace) and the energy generation, transmission and distribution companies, to avoid the effects that the drought may produce. In addition, the Ministry of Economy and Finance must allocate sufficient budgetary resources to address the above.
On Thursday, August 15, through a statement, the Government indicated that according to reports issued by Cenace, in July there was a “significant decrease in contributions in all hydrographic basins.” Regarding the lack of energy, citing data from Cenace, Minister Goncalves said that at the beginning of the year the entity made a projection, calculating an increase in generation of around 10% month to month annually, and at that time the deficit was approximately 1,080 MW.
Emergency will be aimed at addressing the acquisition, leasing and additional generation of electric power
The declared emergency will be aimed at carrying out all necessary urgent actions in the sector and its affiliated entities to address the acquisition, leasing and additional generation of electric power that will reduce the repercussions of the current energy crisis, thus achieving the continuity of the public electric power service.
In addition, the Minister ordered the Strategic Public Company Corporación Eléctrica del Ecuador (Celec EP) to, in accordance with the provisions of articles 57, 57.1 and 57.2 of the Organic Law of the National Public Procurement System, section five of chapter IV of its General Regulations; and related regulations, execute the necessary actions to carry out the emergency procedures for the acquisition and/or leasing of additional emerging generation of electric energy, the supply, construction and commissioning of interconnection systems, whether these are connected to the National Transmission System and/or to the subtransmission systems of the distribution companies.
The emerging additional generation must be available to the SNI by the third quarter of 2024 and the first quarter of 2025, considering the risk that this represents for the continuous supply of the country's electricity demand.
Furthermore, as a general provision, the Ministry of Economy and Finance is urged to carry out the necessary and essential actions for the allocation of financial resources, so that Celec EP can have sufficient public funds to meet the present declaration of emergency in the electric sector and thus fully comply with this agreement. This is due to the technical and financial incapacity that the entity is experiencing.
