2024-08-21 15:32:28
Turkish company Karpowership has won the tender to supply a barge with up to 110 megawatts of electricity to cope with the upcoming drought, but how much will this contract cost Ecuador?
Although the final value of the contract is not yet known, the rules of the competition launched by the state holding company Corporación Eléctrica de Ecuador (CELEC) give an idea of the costs.
According to that tender, Ecuador offered a value of just over USD 0.13 per kilowatt/hour in this contracting process, which it would pay whether the barge operates or not.
This value is obtained by dividing the reference amount of the tender, which was USD 179.3 million, by the 1,283 million kilowatts per hour that the barge could deliver during the 18 months of the contract, discounting the days of scheduled maintenance (plant factor of 90%).
But it must be taken into account that, although the barge will be contracted for 18 months, it will not be used all the time, but only during the critical dry months, which according to the state energy operator Cenace would be concentrated between the months of September 2024 and February 2025.
Therefore, to know the value of the energy actually delivered, the reference value of the tender, of USD 179.3 million, must be divided only for the dry months, which is when the barge will actually be used; that is, between September 2024 and February 2025, the cost of the rate per kilowatt hour would be USD 0.36.
If Ecuador has not yet resolved the electricity supply and returns to using the barge in the dry season of September 2025 and February 2026, then the cost of the barge will be USD 0.18 per kilowatt/hour for the energy actually delivered, says Gabriel Secaira, an electricity expert.
That is to say, we will have to wait to see how much energy the barge delivers during the duration of the contract to determine for sure how much the energy actually delivered will cost Ecuador, but in any case, prices are between USD 0.135 and USD 0.36 per kilowatt/hour, says Secaira.
To these values must be added the cost of fuel supply that Ecuador must guarantee for the barge, which is fuel oil, explains electrical expert Gabriel Secaira.
That is why Secaira considers it to be an expensive energy. He explains that this type of ship usually has medium and long-term contracts with countries, because shortening the time increases the cost of operation and, therefore, the tariff.
In Ecuador, the cost of hydroelectric generation (without distribution costs) is between USD 0.01 and 0.03 per kilowatt hour. The cost of diesel electricity generation, on the other hand, can rise to USD 0.07 and 0.08 per kilowatt/hour, a value to which must be added the cost of imported fuel at international value USD 0.28 per kilowatt/hour, according to Secaira.
In contrast, the electricity generation sold by Colombia to Ecuador cost USD 0.33 per kilowatt/hour in 2023, the highest value in the last three years. But, since the State provides a subsidy to the electricity sector, the consumer paid an average electricity price of USD 0.9 per kilowatt hour in 2023, already including the cost of distribution to homes.