Government contracts for new thermal electric plants but they won’t be operational for months

The National Electric Corporation (Celec) has opened the contracting processes for six diesel-powered electric generation plants. Although Celec says the plants will provide “immediate thermoelectric generation,” it says it will months before they are operational.

The Sacha Thermoelectric Power Plant in Orellana Province.

An Celec official overseeing the contracts admitted the plants are not a solution to current power shortages. “The contracting process and installation will take several months,” he said. “We want to avoid the mistakes that were made with the Progen and ATM acquisitions.

The official was referring to the purchase of dozens of portable generators from U.S. and Uruguayan companies during the 2024 energy crisis. Once they were delivered, it was discovered that less than 10% of them worked as promised due incompatibility with Ecuador’s technical requirements. The government is still trying to recover the $240 million it paid for the units and the Comptroller’s office is investigating potential fraud by both the contractors and Celec personnel.

In a statement, Celec said it has begun the process of leasing land for the new facilities. “Once the contracting process in complete, the modular generation units can be delivered and put into place quickly,” the statement said. “This avoids the long period of design, construction and connection using conventional methods, and allows us to begin electric generation in the shortest amount of time.”

When all six of the diesel-powered plants are in operation they will produce 205 megawatts, according to Celec. The plants will be located in Pascuales, Santa Elena, Guangopolo, Miraflores, Jaramijo and Salitral, coastal locations close to diesel fuel delivery routes.

A complicating factor, according to energy analyst Carlos Avila is the cost and availability of diesel. “It is difficult to calculate the availability and cost of diesel fuel in the current market because of the war in the Middle East,” he says. “Since the country does not refine its own diesel, all of it will need to be imported.”

The government will need an additional 3,200 barrels of diesel a month, says Avila, besides the 150,000 barrels currently imported for thermal generation. “This will be very expensive, of course, and will add to the subsidy burden unless Celec decides to pass the cost to customers,” he says.

Former deputy energy minister Gustavo Nariño says it is “inexcusable” that the government has delayed acquisition of additional electric generation capacity. “This was a priority in 2024 but when the rains returned and the lights came back on everyone relaxed and little more was done,” he says. “Now, when we have another crisis on our hands we see renewed activity. Even after the ATM and Progen disaster, the pressure should have continued to increase generation but the people in charge decided that the problem was over.”

Nariño also criticized the government for its handling of the conflict with Colombia and its impact on the electricity supply. “Outside of the president and his associates, I don’t think anyone understands what this fight is about,” he said. “One thing all of us might soon understand is that it deprives the country of 300mg to 400mg of energy which, by the way, is far more than what the new diesel plants will produce when they go online.”