Ecuador in the dark: Daniel Noboa increases power cuts to 14 hours a day

The contradictions in the government’s discourse on the electricity crisis reveal the absence (and possibly the will) of a plan to improve Ecuador’s electricity system. A very serious deepening of the economic crisis is foreseen.

October 28, 2024 by Pablo Meriguet
Ecuadorian President Daniel Noboa presiding over renewable energy project. Photo: Presidencia EC

The people of Ecuador are now facing 14-hour daily power cuts. The Secretary of Environment and Energy, Inés Manzano, announced on Friday, October 25, that instead of decreasing the length of the ongoing eight-hour cuts, they would be increased by six hours.

The decision came over a week after right-wing businessman and President Daniel Noboa had announced that there would be progressive improvement with regards to the daily power cuts in the country which have been taking place since September 23, 2024. He had, alongside Manzano and Secretary of Production Sonsoles García, who resigned hours later, declared triumphantly that every week the scheduled power cuts would decrease by two hours until reaching zero blackouts.

Many then were surprised by Manzano’s announcement last Friday, who justified the shocking news by saying that the original predictions were “made at that time in the face of different weather conditions and 15-day projections completely different from the current ones.” In other words, in their optimistic projection, they were counting on rain to power the hydroelectric dams and it never came.

An economic disaster

The truth is that the blackouts are causing growing unease among Ecuadorians, many of whom have lost jobs because the businesses in which they worked can no longer produce as before due to power outages. In fact, the industrial sector is one of the most affected. Many other small and medium-sized entrepreneurs have invested thousands of dollars in the purchase of modest electric generators to sustain work, which has implied an important expense in the equipment and in the gasoline it needs to function.

According to the economist and university professor Felix Pilay, “The blackouts have generated millions of dollars in losses in various sectors of the Ecuadorian economy so that a sharp interruption in economic growth is expected, which is evident in the Gross Domestic Product (GDP). Massive power outages have led to the paralyzation of productive units, causing a wave of layoffs and economic losses in production and, therefore, in income. According to estimates by the Chambers of Commerce, small and medium-sized companies (SMEs) have reported a 30% drop in their operating capacity during the blackouts.”

Not to mention the hundreds of thousands of students who do not have electricity, the vehicular chaos caused by traffic lights that are out, and the difficulty of attending a medical appointment when there is no electricity. Commerce is radically compressed, and its income is severely reduced. The agricultural industry cannot refrigerate its products, which produces a decrease in rural production and a consequent increase in food prices. Tourism is deeply affected by the reluctance of thousands of tourists to travel to a country where there is no electricity, which has a direct impact on travel agencies and restaurants that depend on money from tourism.

According to Francisco Jarrín, President of the Chamber of Industries of Guayaquil, each hour of blackout costs the country about USD 12 million. If we add these figures together, more than USD 3.6 billion were lost during one month of the energy crisis, which implies a devastating blow to an Ecuadorian economy that had already been on the decline for several years.

Data from the Central Bank of Ecuador is slightly less catastrophic. According to the institution, the country’s GDP fell by 2.2% during the second quarter of 2024, which is equivalent to some USD 2.6 billion lost thanks to an energy crisis that severely punishes the poorest and the middle class (who cannot buy electricity generators for their homes or businesses as the country’s wealthiest do).

Less electricity for Ecuadorians

According to the government’s narrative, the blame for the crisis lies with, on the one hand, the severe drought affecting the country, as well as to the fact that previous governments only built hydroelectric plants, causing a strong dependence of the country on rainfall and the level of river flows to sustain its electricity supply.

The truth is that, beyond this or that narrative, daily life in Ecuador has changed radically and the discontent of society increases every day. No one can assure anymore, as a few months ago, that Noboa would most likely win the future elections. Perhaps that is why the President had the urgency to go on television and affirm that everything was under control and improving. The President smilingly announced a reduction in blackouts without showing concrete evidence of the plans in execution to reduce the time of blackouts. Although he stated that in the next few months, the country would be able to increase the country’s energy reserves by 1598 megawatts through the purchase of turbines, barge rental, and other projects, it was not explained how such plans, which will take months to implement, would help in the short term in the crisis and justify a reduction in blackouts.

In Friday’s announcement, it was finally made clear how they intended to carry out their “plan”: the government was hoping for rain…and it did not rain. Since it didn’t rain, the outages will increase.

Response from the left

Left and progressive figures have vehemently condemned the government’s lack of answers and lack of solutions in the face of the massive electricity crisis.

The President of the Citizen’s Revolution Party and pre-candidate for the 2025 elections, Luisa González, stated in a video, “In this electricity crisis that we are all facing, while some can turn on their generators and continue on, many of our brothers and sisters can’t even feed their families because they have lost their jobs. This situation is creating a lot of anguish for thousands of families that are living with uncertainty about whether or not they will keep their jobs, their businesses, or pay their debts.” She also criticized Noboa for having absconded from the public eye, not joining Secretary Manzano for the bad news announcement on Friday, “At the bare minimum, we deserve that our leaders show their faces and are present to address problems.”

González proposed several measures that the Citizen Revolution party will take to address the crisis including: maintaining public investment to protect jobs, the suspension of certain debts to alleviate the burden on families, create free co-working spaces, and introduce legal reforms to encourage investment in electricity generating projects by public companies. She also presented a list of demands to Noboa’s government to aid the short term response, stating: “The government should stop lying and take effective measures for the people.”

The president of CONAIE (Confederation of Indigenous Nationalities of Ecuador), Leonidas Iza Salazar also condemned Noboa’s behavior in the face of the electricity crisis and stated, “governing is not just sitting in Carondelet (the seat of government) and waiting for it to rain.” He called on the president to subsidize the cost of fuel given that many families have turned to fuel-powered generators to make it through the day amid the drastic cuts, and implement measures to avoid speculation on generators amid this time of need. He also insisted that the government declare an emergency in the electrical sector in order to use resources from other sectors to alleviate the ongoing crisis.

Does the government really want to overcome the energy crisis?

Thus, Ecuador continues to go through an energy crisis that will have unforeseen political consequences and already palpable negative economic consequences. Ideologically, it is hard to think how the pro-government media continues to justify the failure of several governments to adequately address the crisis, while attacking, for example, the government of Cuba, which has managed to overcome an unprecedented national blackout in a week. The comparison is even more stark given the conditions that Cuba suffers under the US-imposed economic blockade, while the Ecuadorian government, which receives continuous support from Washington, finds no way out of the crisis.

This is probably the reason why many opposition politicians have returned to the famous “Shock Doctrine” of the Canadian writer Naomi Klein: there is benefit to prolonging the crisis, the discontent, the helplessness, the chaos, and, in this case specifically, to allow the collapse of the electricity system to justify its privatization. In short, according to some experts, the Noboa government does not wish to overcome the crisis, but to deepen it to justify a clear transformation of the economy and national politics. In this way, the last agreements that the previous governments of Moreno and Lasso signed with the IMF would begin to be fulfilled: the total application of neoliberalism in Ecuador.