Ecuador’s power outages due to drought

Ecuador is facing a peculiar problem. It depends for 70 per cent of its electricity on hydroelectric sources. The country is facing drought for the first time in 60 years, its rivers running dry and its reservoirs near empty.

So the government had to impose power cuts since April, and they have now extended to 14 hours a day. President Daniel Noboa said the blackouts would end. But it raises the important question. Droughts would not only affect agricultural output, but it also affects power production when the dependency is as high as it is in Ecuador. And this has huge ramifications for the economy, especially the industry.

And in the manufacturing sector, it is the small units that suffer the most because they cannot afford to run generators. Production decreases, manufacturing units close down, and people are left without jobs. Smaller companies represent 90 to 95 per cent of the business sector. Says Marcela Arellano, president of the Ecuadorean Free Trade Union Organizations (CEOSL), “We were already impacted prior to the blackouts, but what the blackouts did was deteriorate out living conditions even more.”

Arellano does not sound hopeful that things will improve. She says, “We don’t see a path for recovery. First, there is no certainty that the outages will cease, and second there are no guarantees that there will be economic relief for the small and medium-size businesses.”

Energy expert Luis Hidalgo explained the problem of Ecuador’s power problem. He said electricity and fossil fuel subsidies have kept the power rates low for the consumers, and government did not derive any income from it. As a result, the government could not invest in other forms of energy like solar and wind. And the private industry had no incentive to invest in alternative sources of energy.

For some time Ecuador imported electricity from Colombia. But as drought began to hit Colombia, it too had restricted electricity exports. Hidalgo believes that the grim situation will continue till April. Hydroelectric power has been considered a reliable renewable source of energy, but Ecuador’s plight shows that in the face of droughts, which are not to be ruled out, hydroelectric power becomes an unreliable or fluctuating source of electricity. The thumb rule is that no country can rely on a single source of energy, and that its energy basket should remain diverse.

Ecuador is falling short of 1000 to 1400 megawatts of power. In 2002 it generated 8,864 megawatts of power. The deficit is large enough. The unprecedented drought has made the situation worse. Protestors marched on the presidential palace in November, chanting as Noboa faces re-election in 2025, “There’s no light. There’s no education. And you have the nerve to ask for re-election?”

Noboa has promised that by December things will get back to the normal state. The government has bought a floating 100-watt thermoelectric – it is a means of producing electricity from heat or other sources of heat like wood, natural gas, fossil fuel and even solid waste – plant with 23 generators from Turkey.

But the problem is not going to get solved easily. Noboa is aware of it and he wants to reallocate power subsidies, ending it for the mining industry, for example. He noted on social media in October: “The mining companies in Ecuador consume more energy than a hospital needs to operate. And yet, their energy rate has been subsidised by the state.

The subsidies must go to those who need them most.” It is a realisation that has come too late among the decision-makers. So hard decisions have to be taken. There is no clarity as to when the drought will end.