WSHPDR_2013_Final_Report-updated_version

Figure 3 Hydropower project development process in Ecuador
Sources: Galárraga Sánchez 8
Barriers to small hydropower development
• Instability in the Electricity Generation Market.
During the last four years (2007-2011), the
Government policy for the electricity sector has
switched from an open market for generation (where
the generators could sell their electricity on the
electricity wholesale market) to a more state-centred
market. For this reason, private investment into new
generation projects was limited until the new rules of
the market were established. In 2011, CONELEC issued
regulations No. 002/11, No. 003/11 and No. 004/11,
which determine that the State will promote private
investment in renewable energy projects.
• Lack of Tax Incentives for Private Investors
With the new regulations, the investors of renewable
energy projects will have a preferred price for each
kWh sold to the grid and the certainty that the
electricity generated will always be bought by the
State (as long as it does not surpass 6 per cent of the
total generation available in the country). However,
investors cannot count on any incentives for revenue
tax reductions.
• Large projects receive all the attention
In 2010, the country underwent an extended dry
season which caused electricity shortages, with
ensuing blackouts which concerned the population
and slowed down the economy. The Government
introduced plans for projects to counteract this
situation. These projects were divided in two
categories: the first one comprises large
thermoelectric plants with internal combustion
engines that started to be installed in 2011; this
process will last until 2013. The second category is
composed of large hydropower projects programmed
to start operating in 2015. With this new priority to
build large hydropower projects to prevent electricity
shortages, small hydropower has been pushed behind
in the list of State priorities.
References
1. Central Intelligence Agency (2012). The World
Factbook. Available from
www.cia.gov/library/publications/the-world-factbook/
2. Embassy of Ecuador in the United States (2011).
About Ecuador. Washington D.C. Available from
www.ecuador.org/nuevosite/informacionecuador_e.p
hp.
3. Chiriboga, Roberto and Juliette Mac Aleese (2005).
Guía Metodológica de inventario de Recursos Hídricos.
Foro de los Recursos Hídricos. Quito. Available from
www.aguaycambioclimatico.info/biblioteca/CESA_AG_
0140.pdf.pdf.
4. Consejo Nacional de Electricidad (2011). Boletín
Estadístico Sector Eléctrico Ecuatoriano 2010.
Available from www.conelec.gob.ec/indicadores.
5. Consejo Nacional de Electricidad (2008). Plan
Maestro de Electrificación 2009-2020. Quito. Available
from
www.conelec.gob.ec/images/documentos/PME0920C
AP1.pdf.
6. Ecuador, Ministerio de Agricultura y Ganadería
Acuacultura y Pesca, Consejo Nacional de Electricidad
–and Sistema de Información Geográfica y
Agropecuaria (2008). Zonificación de Áreas de Riesgo
de Desastres Naturales para la Infraestructura
Eléctrica del Ecuador. Quito.
7. Ecuador, Ministerio de Electricidad y Energía
Renovable and Colegio de Ingenieros Mecánicos de
Pichincha (2008). Proyecto de Recuperación de
Minicentrales Hidroeléctricas. Quito.
8. Remigio H. Galárraga Sánchez (2004). Estado y
Gestión de los Recursos Hídricos en el Ecuador. Quito.
Available from
http://tierra.rediris.es/hidrored/basededatos/docu1.h
tml.
9. Ley de regimen del secto eléctrico (1996).
Suplemento – Registro Oficial N°43. 10 October.
Available from
www.conelec.gob.ec/normativa_detalle.php?cd_norm
=203.
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