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Ecuador

( Last update: August 2006 )

Electricity Market
Sector structure
Upstream The sector is heavily reliant on hydro-schemes (about the 63%) while the rest of production derivates from thermal facilities.

Six state-owned companies are the dominant players. Other important private producers supply Quito and Guayaquil urban regions.

Centro Nacional de Control de Energía (CENACE) operates the wholesale electricity market (MEM) where spot trades or bilateral contracts (one-year maximum duration) take place.

Generation tariff for captive customers are regulated and approved the National Electricity Council, the energy regulator (so called “El Consejo Nacional de Electricidad – CONELEC”). Eligible costumers contract in the MEM with distributors or generators.
Networks State-owned Transelectric SA is the exclusive licensee as TSO under RTPA regime.

Transmission and distribution tariffs are fixed by CONELEC.
Downstream The sector is publicly-owned.

Distributors companies are responsible to supply tariff consumers at prices fixed by NCE often below cost of services.

Eligibility level is fixed at 2 MW.
Gas Market
Sector structure According to OGJ, Ecuador had 345 billion cubic feet (Bcf) of natural gas reserves as of January 2006.

Domestic production of natural gas is negligible as well as domestic demand and support infrastructure. One natural gas field Amistad, located in the Gulf of Guayaquil operated by Noble Energy SA that supply the 130-MW gas fired-power plant Machala.

Natural gas production from the Amistad field flows to Noble's Machala facility, a 130-megawatt (MW), onshore, gas-fired power plant that supplies electricity to the Guayaquil region.

Oil industry producers flare most of the gas associated with petroleum drilling, using only small amounts as fuel. Moreover distance from markets made exploitation of the gas uneconomical, although a small plant to harness the gas as a fuel was completed near Nueva Loja in the mid-1980s.
Current issues On going privatisation and liberalisation process of electricity industry by progressively reducing the eligibility level.

Develop electricity imports from neighbouring countries.

Generation capacity expansion projects: some of them will be put in operation within the 2007 (i.e. the 180-MW Mazar hydroelectric and the 230- MW San Francisco run-of-river style plant; increase country’s gas-fired capacity (i.e. Machala plant) and complete expansion of Hidro generation facility up to 37.5 MW by the 2006).

Other interesting projects are: the Palanda plant (81,7 MW of capacity planned); the Cidras plant (77,3 MW); the Isimanchi plant(51,1 MW); the Numbala plant (39,2 MW) and the Valladolid plant (22,3 MW).

Reducing energy price by more intensive use of natural gas for electricity generation and increase price stability.

Improve quality of service and security of supply by developing adequate regulation and service quality standards.
National Legislation Electricity Law 1996 available here
Electricity Regulations available at CONELEC web site br />
Sources IERN staff on publicly available information.