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ECUADOR - Green Economy

Pablo Lopez

General Manager, GranSolar

Bio

Pablo López holds a commercial engineering degree and a master’s of science from Finance Universidad Adolfo Ibáñez. He also has an Executive CFO from the University of Chicago Booth School of Business. He has 12 years of experience in structuring and developing renewable energy projects and was responsible for the first photovoltaic project financed under a project finance model. He is the General Manager of Gransolar and Co-Founder of Solarteam SAS.

TBY talks to Pablo Lopez, General Manager of GranSolar, about renewables, distributed generation, and environmental responsibility. What factors make Ecuador a country of opportunities today? Ecuador has become a hub […]
TBY talks to Pablo Lopez, General Manager of GranSolar, about renewables, distributed generation, and environmental responsibility.
What factors make Ecuador a country of opportunities today?

Ecuador has become a hub for renewable energy, with the government diversifying into solar and wind power, in addition to hydro-energy. In 2022, Ecuador awarded 511MW in February, out of which 300MW will be solar and 50MW wind. The high altitude of Ecuador allows for efficient use of solar energy, and the south of the country has notable wind resources. The opportunity for solar and wind power is much greater than hydro-power, and with the right environmental studies, solar power has minimal impact. Overall, 2022 was a successful year in terms of companies arriving in Ecuador, with 511MW awarded in February. Of that, at least 300MW will be solar and 50MW wind. The remainder will likely be hydro. It was a successful year. Some years ago, the government was investing notably more interested in hydro-energy, but it is diversifying into solar and wind. Ecuador is facing some problems at its hydro plants in 2022 due to drought. As a result, the nation had to purchase a lot of energy from Colombia. We had to restart diesel turbines and thermal energy, which is rather bad not only for the environment, but also for the national budget. However, Ecuador is fortunate in terms of its potential for solar energy. We have very good irradiation, being at a rather high altitude, and we can be very efficient in terms of solar. In addition, we have notable wind resources in the south. You can install a PV plant in under a year compared to the years it takes for hydro power. On top of this, the environmental impact of a solar plant is minimal. If you conduct the right environmental studies, there is virtually no impact. Hydro has its occasional problems. You impact the current of the rivers as well as the communities that live along them. The opportunity for solar and wind is much greater than hydro, and I welcome the government’s interest in it.


How do you assess Ecuador’s evolution regarding renewables over the past decade?

Ecuador’s progress in renewable energy has been dramatic over the past decade. While the infrastructure was mainly dedicated to hydro-power until 2012, the past three years have seen substantial development in the renewable energy sector, with international companies now locally headquartered in Ecuador. The legal and contract security has also improved, and local private companies and public authorities now understand much better what it means to be bankable for a project finance model for over 10 years. It has been dramatic. Since 2012, we have seen quiet years in terms of development because the infrastructure was dedicated to hydro-power. Yet, over the past three years, we have developed substantially with international companies now locally headquartered here. We have banks and international companies investing in Ecuador. So, regarding legal and contract security, we have also developed a lot, having improved our relationship with state authorities. Local private companies and public authorities both now understand much better what it means to be bankable to cover a project finance model for over 10 years. And now we also understand the mechanism of this market.


How can distributed generation of solar rooftops promote increased use of renewable energy?

The distributed generation of solar rooftops presents a huge opportunity for increased use of renewable energy. Ecuador now has regulations in place that help private companies to install their own generation on rooftops or on their own land up to 1MW per meter. This not only helps the company but also the utility itself, as demand is always on the rise. Furthermore, the use of inverters ensures that the grid has greater stability in terms of voltage and frequency. In terms of financials, the payback period runs at about five years, and signing contracts for 25 years allows for free energy for the next 20 years. We have huge opportunities there. We now have regulation in place, namely that helps private companies to install their own generation on rooftops or on their own land up to 1MW per meter. That will not only help the company but also the utility itself, because it is easy to generate 1MW. In the industry, from contract signing to COD it takes less than six months. The regulation works well and the relationship between the private sector and the utility is smooth and predictable. It is going to help the utilities because demand is always on the rise. Meanwhile, the inverters that we use ensure that the grid has greater stability in terms of voltage and frequency. Some companies have the heart for nature and the environment, while others have to first base such considerations around finance. Adaptation to solar has the capacity to do much good for the environment. For example, the shrimp industry consumed much diesel in its engines. And so if it migrates to solar you’re talking about a substantial reduction in carbon footprint. In terms of financials, it’s very good business for the private sector because the payback period runs at about five years, and you sign contracts for 25 years. So, after five years you essentially enjoy free energy for the next 20. If you’re a company thinking long term, it is a pretty good business. And meanwhile customers today are increasingly demanding that companies, at least those that they export to, are also environmentally responsible. In that manner environmental awareness spreads across the value chain.

How are you cooperating with the Ministry of Education and how can Ecuadorian youth see the impact of GranSolar?

At Gransolar, we take our social responsibility seriously, not only to the environment but also to our neighbors. We invested almost USD 400,000 in infrastructure for local primary schools in Salinas de Ibarra, helping a total of 459 students. Our investment not only improved classrooms and provided materials but also supported the educators themselves. We partnered with the foundation Unidos por la Educacion for the long term, as we believe education is the best investment we could commit to for the future. Our cooperation with the Ministry of Education has helped improve local education infrastructure, benefiting Ecuadorian youth and supporting the long-term development of the country. At Gransolar we have to be responsible not only to the environment, but also to our neighbors. We have our solar plants in Salinas de Ibarra and in 2022 we invested almost USD 400,000 in infrastructure for students. We improved local primary schools helping a total of 459 students. Their schools had numerous infrastructure issues and also a shortage of materials. So, we invested not only on making better classes and providing material but also we invested in the educators themselves. We’re working with a foundation called Unidos por la Educacion. We could easily invest in a soccer field or better classrooms but that’s very short term, and we wanted something with greater impact. That is why we opted to work with Unidos por la Educacion for the long term. This foundation is going to be looking at our schools and helping deserving teachers and students. Education is without doubt the best investment we could commit to for the long term.

What factors make Ecuador a country of opportunities in current times?

Ecuador has become a hub for renewable energy, with the government diversifying into solar and wind power, in addition to hydro-energy. In 2022, Ecuador awarded 511MW in February, out of which 300MW will be solar and 50MW wind. The high altitude of Ecuador allows for efficient use of solar energy, and the south of the country has notable wind resources. The opportunity for solar and wind power is much greater than hydro-power, and with the right environmental studies, solar power has minimal impact.

How do you assess Ecuador’s evolution regarding renewables over the past decade?

Ecuador’s progress in renewable energy has been dramatic over the past decade. While the infrastructure was mainly dedicated to hydro-power until 2012, the past three years have seen substantial development in the renewable energy sector, with international companies now locally headquartered in Ecuador. The legal and contract security has also improved, and local private companies and public authorities now understand much better what it means to be bankable for a project finance model for over 10 years.

How can distributed generation of solar rooftops promote increased use of renewable energy?

The distributed generation of solar rooftops presents a huge opportunity for increased use of renewable energy. Ecuador now has regulations in place that help private companies to install their own generation on rooftops or on their own land up to 1MW per meter. This not only helps the company but also the utility itself, as demand is always on the rise. Furthermore, the use of inverters ensures that the grid has greater stability in terms of voltage and frequency. In terms of financials, the payback period runs at about five years, and signing contracts for 25 years allows for free energy for the next 20 years.

How are you cooperating with the Ministry of Education, and how can Ecuadorian youth see the impact of GranSolar?

At Gransolar, we take our social responsibility seriously, not only to the environment but also to our neighbors. We invested almost USD 400,000 in infrastructure for local primary schools in Salinas de Ibarra, helping a total of 459 students. Our investment not only improved classrooms and provided materials but also supported the educators themselves. We partnered with the foundation Unidos por la Educacion for the long term, as we believe education is the best investment we could commit to for the future. Our cooperation with the Ministry of Education has helped improve local education infrastructure, benefiting Ecuadorian youth and supporting the long-term development of the country.

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