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 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