The future of energy and ICT sectors in Ecuador: perspectives from a developing country

Sustainability issues have gained importance in the agenda of governments and organisations, including the developing world. This was the core idea that motivated my investigation: “Governance interdependencies in the shift towards sustainability: the case of the electricity and telecommunications sectors in Ecuador”.Eva Patricia Ochoa Bosquez

I was awarded a scholarship by the Ecuadorian government to pursue a Master’s degree and I recently graduated from the SPRU department at the University of Sussex. As a developing country in Latin America, we still face some important challenges related with pervasive economic and social issues. Economic growth has been traditionally dependent upon revenues coming from oil and primary products, however; price fluctuations summed with political tensions and corruption have resulted in severe crises, social discontent and inequality. Still, in recent years some stability has been achieved and policies to promote sustainability practices have been embedded in the national planning.

These are focused on providing inclusive access to basic services, promoting a new model of economic growth by reducing dependence upon oil as a source of revenue and encouraging environmental friendly technologies. To accomplish this, the Ecuadorian “strategic sectors” (energy, telecommunications, hydrocarbons, mining, water and environment) play a significant role.  These sectors are deemed to be exclusively under management and control of the State, in order to guarantee technological and industrial transformation of these, and be oriented towards societal needs. These initiatives seem to correspond to a new ideological trend that moves away from the neo-liberal ideas that dominated the Latin American scene in the early 90’s and give governments a central, steering role.

My research is focused on two sectors: electricity and telecommunications. A set of sustainability goals to be accomplished by 2017 include increasing the participation of renewables  in electricity generation and achieving a bigger penetration of ICTs, especially aimed at neglected areas or segments of society. As these targets imply expansion and modernisation of both sectors, they should account for the existent interplays regarding infrastructure, capacity and demand. This idea is based on the research made by Raven (2006) and Konrad et al (2007) which define a typology of relationships between technological regimes which can influence the path of sustainability transitions.

My research analyses the nature of the interdependencies between electricity and telecommunications in Ecuador over two periods of time: 1) between 1992 and 2006 when both sectors went through reforms towards privatisation and; 2) in the period 2007-2013 and up to present time where both are under state management. These two periods of time are key as they correspond to different scenarios influencing the management of both sectors: the first period is the result of the implementation of neo-liberal ideology in Latin America, which promoted opening the economy to foreign capital, reducing State intervention, de-regulation and privatisation of public services; and the second corresponds to a time of economic improvement and greater influence of the State.

The research included data collection from electronic journals, papers and books; and grey literature: governmental and non-governmental reports and statistics, articles in newspapers and magazines, unpublished theses, PowerPoint presentations and official accords, decrees, laws, mandates, ordinances, regulations and other legal documents. Additionally, in order to achieve a better insight about past and present developments of both sectors, primary research was conducted through questionnaires aimed at Ecuadorian experts within the fields of telecommunications, electricity and public policy.

As a result of this investigation, I found that historically both sectors have shared structural similarities; as both have been subject to the same regulation.  However, both regimes have been managed separately. The electricity and telecommunications sector also have a symbiotic relationship, as telecommunications run on electricity. In the first period, electricity companies began deploying telecommunications networks over their infrastructure. However, both sectors suffered from lack of investment, inefficient management and outdated technologies.

In the second period, the State took a central role in long-term planning and big investments were made in both sectors. Structural similarities have remained, and as ICT’s were deemed as powerful tools for technological and social improvement; the complementarity between the telecommunications and electricity sectors increased.  More electricity distribution companies began to deploy telecommunications networks over their infrastructure and electricity companies obtained economic benefits by supplying telecommunications services. As telecommunications became essential for electricity management, the two sectors became mutually dependent on the technological enhancements and infrastructure expansion of the other.

Although the State has a central role in achieving the 2017 goals, its ability to provide appropriate and timely funding for the consecution of the targets and possible delays and disruptions in the normal operation of both sectors (caused by upcoming sectorial Laws) proved to be severely limited.  On the other hand, private actors in both sectors have a marginal participation in the governance of policies towards the sustainability objectives. Similarly, there is still much to do regarding the involvement of customers for the efficient application of sustainability practices. This is of special importance for the continuity and long-term planning of sustainability projects, which need to be legitimized by people.

The symbiosis between the two sectors entails co-evolution of technologies and infrastructures to accomplish the sustainability goals.  This implies a challenge for governance, in order to promote robust and reliable services within one regime in order to enable and avoid failures in the other. The upcoming projects regarding undergrounding of telecommunications and electricity overhead cables and the implementation of smart grids demonstrate the need forcoordinated efforts between the two sectors.

These findings point to some important considerations for policy-making in Ecuador:

  • Future planning would benefit from a more diverse approach regarding technologies in order to avoid lock-in. Currently, the achievement of the 2017 goals relies on a few hydro-power projects  and internet provision.
  • It is important to embed sustainability policies in stronger legal instruments (such as the upcoming sectoral laws) and ensure that people recognise the importance of them, so that they demand their accomplishment to future governments.
  • As consequence of the current hierarchical mode of governance, the State is in charge of the design and execution of sustainability policies. Both aspects could be benefited with greater involvement of the private sector and customers.
  • Constant evaluation of policies can show the trade-offs and side effects of these; such as the impacts of hydro-power on local fauna and agriculture, the increase of ICT’s consumption resulting in growing carbon emissions and increasing demand of electricity caused by bigger penetration of ICT’s. This could allow a better designing of policies and ensuring they serve its sustainability purpose.

Sustainability and inclusion have become an important component in the current government’s discourse. As a young professional returning to my home in Ecuador, I find very exciting to make a contribution to transform these ideals into a reality. Moreover, the complexity of this challenge calls for a variety of solutions and inter-disciplinary research; which has been one of the fundamental pillars of my studies at SPRU.

 Eva Patricia Ochoa Bosquez recently graduated from the MSc Technology and Innovation Management program at SPRU.

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