Since 2007, Ecuador has been working on strategies to improve energy efficiency, mainly in the residential sector. In 2014, Ecuador started implementing the Liquefied Petroleum Gas (LPG) Substitution Programme (PEC) 1 that contains, as a central component, the introduction of induction cookers across the country.
The PEC is closely aligned with Ecuador’s development plans and objectives, aiming at reducing its dependence on imported and subsidised fuels, and increasing the share of renewable energy in the matrix. As such, it forms part of a comprehensive and coherent package of fiscal, development and energy policies that combine long-term planning for hydropower with a strategy to phase out LPG subsidies, and the elaboration of market based mechanisms to promote private investment. The GHG mitigation potential of the programme has led Ecuador to consider it as a NAMA.
Main features of the PEC include high level political commitment that supports the initiative in a holistic and integrated manner as well as strong involvement of key ministries across all sectors. The elaboration of a sound, multi-criteria socio-economic analysis and an effective communications strategy were also central factors for the success of this programme.
Public utilities to support the reinforcement of the distribution networks and consumer-level connections.
The Latin American Development Bank (CAF) and the Inter-American Development Bank (IDB) provided credits for some components of the PEC (including a range of activities, from technical studies and strengthening capacities to enhancement of the distribution system).
Low Emission Capacity Building (LECB) Programme implemented by the United Nations Development Programme (UNDP) on behalf of the European Commission, the German Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB), the Australian Department of Climate Change and Energy Efficiency and AusAID (including NAMA and MRV design, ongoing).
Investments in the electric sector: According to the Master Plan of Electricity, the total investment needed in the electric sector until 2023 is approximately $ 11,619 million, of which 91% will come from the public budget and 9% from private capital. 61% of the total amount is planned to be spent on generation, 10% on transmission and the remaining 29% on distribution and marketing (Muñoz, 2013).
NAMA financing: Regarding the NAMA, it is estimated that the government will provide US$ 2,2 billion, complemented by US$ 97 million from other sources as shown in Table 1 (Parra, 2015). This will correspond to a combination of:
- Ministry of Electricity and Renewable Energy, promoting and leading the PEC.
- Ministry of Industry and Productivity, for the activities related to the production and commercialisation of locally-produced induction stoves.
- Ministry of Environment, for the technical component of the PEC in terms of GHG mitigation and climate change.
- Ministry of Hydrocarbons for issues related to LPG consumption.
- Governmental investment
- Low interest loans from multilateral banking
- Climate funds (Green Climate Fund or other climate initiatives)
- Public-private associations