LatinFinance - March/April 2015 - Supplement - 10

INTERVIEW

Going green
Ecuador's Minister of Electricity and Renewable Energy Esteban Albornoz has an academic background in electricity science, and
previously ran the country's electricity corporation, Celec. He spoke to LatinFinance about the country's clean-energy revolution. This is
an edited transcript of the discussion.
LF: What are the main projects under development today?
EA: Right now, we have eight large hydroelectric projects
under construction. They will add 2,800MW in new
generating capacity to the Ecuadorian power grid. These
projects will more than double our installed capacity when
they are finished at the end of 2016.
LF: What is the investment in these projects?
EA: The investment is close to $5 billion, but we are currently
working on new projects that will be added to our portfolio in
the coming months. Feasibility studies have been concluded
for the 190MW Chontal hydroelectric plant and the 596MW
Cardenillo plants. Chontal would require around $600
million to build, and the investment in Cardenillo would be
above $1.2 billion.
We have a huge project, Río Santiago, and are at the stage of
completing the feasibility studies. This would be 3,600MW
with an investment of $4 billion. It would be more than
double the size of our capacity on its own.
We have inaugurated our first project on the mainland using
wind power. We already have two wind farms operating on the
Galapagos Islands. We will continue to add new power from
non-traditional sources.
LF: The emblematic project has been the Coca Codo
Sinclair plant. Where is that today?
EA: It is the biggest project, with 1,500MW. It is around 80%
complete and will begin operating in February 2012. The cost
is above $2.2 billion.
LF: The other big issue is transmission. Where is Ecuador
on that front?
EA: Obviously, we have to transmit the energy we are
generating to consumption centers. We are building a 500kV
line, with an investment of $600 million. It is halfway finished
and will be ready by 2017. We have invested $1.4 billion in
transmission lines since 2007 and lines under construction or
planned are $900 million.
We have invested another $1.6 billion to improve the quality
of distribution and will invest $600 million between today and
2017.
These have been major investments, because the power grid
and distribution systems had been abandoned by the state. We

10 A Supplement to LatinFinance - March/April 2015

had to recuperate what existed and bring the electricity system
up to par with international standards.
LF: What does it mean for the country that you are
doubling capacity and could even add a 3,500MW project?
EA: The fundamental issue is changing our energy matrix to
use renewable sources. Ecuador's geography provides us with
tremendous capacity for hydroelectric power that was not
taken advantage of in the past.
We are now taking advantage of our renewable resources.
When the eight projects are working, Ecuador will have one
of the cleanest energy matrixes in the world, with more than
90% of power consumed in Ecuador generated by renewable
sources. Hydropower will be the star of our system.
With the eight new plants, Ecuador will save more than $1
billion annually in electricity bills. We are going eliminate
the emission of thousands of tons of CO2, creating a green
economy and other opportunities.
We are an oil-producing country and we could have opted
for the easy route, building thermal plants to make use of our
production. We opted for hydroelectric plants, which have
been more costly, but the best decision for Ecuador in the long
run.
LF: But you still have thermal generate plants in the mix?
EA: It is important to understand that we cannot only rely
on hydroelectric power. We need thermal plants. We have
modernized our thermal park, which used diesel that we had
to import. We now use heavy crude that we produce. One of
the crazy things in our history is that we are an oil-producing
country, but built power plants that ran on a product we did
not produce and had to import.
The thermal plants become backup generators as we bring on
line the new hydroelectric plants. They will provide security to
the system.
LF: Could the Ecuadorian electric company, Celec, issue
bonds to cover investment?
EA: Nothing has been decided. We are analyzing a number of
factors. There is confidence in the international community,
with projects underway involving capital from Chinese (Coca
Codo Sinclair) and Russian (Toachi Pilaton) companies. We
are confident the new projects will go ahead. LF

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