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CELEC

ECUADOR - Energy & Mining

Gonzalo Uquillas Vallejo

General Manager, Electric Corporation of Ecuador (CELEC EP)

Bio

Gonzalo Uquillas Vallejo has more than 40 years of experience in the Ecuadorian electricity sector, having worked on the automation of the Ecuadorian national network and its electrical interconnections with Colombia and Peru. At CENACE, he was director of operational planning from 1999-2003, director of information systems from 2003-2016, and national manager of technical development in 2017. He was first appointed general manager of CELEC EP in 2018 before becoming Vice Minister of Electricity in 2020. In 2022, he became General Manager of CELEC EP for the second time.

“There are also several solar projects ongoing in the south of Ecuador, including 300-MW projects in Loja Province.”
Responsible for electricity generation and transmission, CELEC aims to attract private investors to modernize the country’s infrastructure with a focus on hydropower, solar, wind, and geothermal projects.
What is CELEC’s strategy to attract private investors, and how will they benefit from investing in Ecuador?

The second-biggest public enterprise in Ecuador, CELEC oversees the generation and transmission of about 90% of electricity in the country. It also exports electricity to neighboring countries such as Colombia and Peru. CELEC has established a solid reputation and is keen to develop close partnerships with private investors to give Ecuadorians a more modern and updated electricity infrastructure for generation and transmission. There are several partnerships possibilities available, such as public investors or international private companies. We plan to develop direct agreements to build new generation power stations and transmission lines and will put out an international call for tenders for investors to present proposals.

What is the primary strength of Ecuador’s energy metrics?

Ecuador is blessed with a large amount of hydropower. For example, the country is able to meet 93% of its electricity demand using hydroelectric projects; however, that changes dramatically during dry seasons because most of the country’s power stations are located in the eastern part of Ecuador, and one of the upcoming plans is to also develop new hydroelectric power generation close to the Pacific side of the country as well. We also want to develop several solar and wind projects in order to better diversify the country’s energy transition. It is not just about the availability of generation or new generation, but also ensuring electricity security. Ecuador has been linked to Colombia since 2003, and it is planning a new electrical connection with Peru as well. We are finalizing the financial side of that USD300-million project that will connect the Chorrillos substation to the Peruvian border. The project should begin operation by 2027 and is being financed by IDB and the European Investment Bank. From 2003-2016, Ecuador was a net importer of energy from Colombia, though we later started to export energy to Colombia when our new power stations such as Coca Codo Sinclair and Minas San Francisco came into operation. Still, 1Q2023 was difficult due to severe dry conditions, and we had to import a large amount of energy from Colombia. We paid about USD76 million that quarter to import about 12% of Ecuador’s electricity needs.

What role does CELEC play in the country’s transition toward sustainable energy?

We have identified potential hydroelectric projects such as Abitagua. There are also several solar projects ongoing in the south of Ecuador, including 300-MW projects in Loja Province. The private investors there need to set up the rules for an agreement with CELEC before they can start developing the project, though those projects should be ready to operate in a few years’ time. Geothermal is another great resource for Ecuador, and we hope to sign a financing agreement with the Japanese government by mid-2023 to guarantee the development of a 50-MW geothermal project in northern Quito. There is a possibility of developing other geothermal projects, including some on the Galápagos Islands. There are many volcanoes there; however, the restrictions there that protect its ecological systems have not made it easy to develop new generation processes, and we will have to proceed carefully.

What are CELEC’s plans for 2023, and what strategies will you implement to achieve your goals?

We have many objectives for the next two years. We plan to reinforce private partnerships this term in order to promote and develop new generational transmission infrastructure projects. Accordingly, CELEC has developed new rules and regulations for partnership and association with private investors to achieve this in the near future. For example, we have identified 10 new projects that will require about USD1.5 billion in investment and will take this plan to the board of directors in the coming months for approval. We will then promote this new tool for new investors globally so they can partner with CELEC to develop new generation and transmission projects. We also want to improve the company’s governance as well as its operations to be more efficient.

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