Four hundred thousand people were without Ande electricity over the weekend in Paraguay, the country with the highest amount of clean energy per inhabitant in the world. How is it possible? There is no short answer for causes. We go in parts.
Where is the problem
To simplify it a lot, we could think that an electrical system has three legs: the generation of energy – largely covered by hydroelectric plants – the transmission of energy – the 500 kv lines and the substations – and the distribution of energy – the electric clothesline, transformers and connections that carry electricity to the user.
Both Juan Encina, former president of the Union of Engineers of ANDE and professor of Engineering UNA, and Fabián Cáceres, engineer of ANDE; the researcher Cecilia Vuyk, specialized in energy sovereignty; the engineer Mercedes Canese, researcher and former Deputy Minister of Mines and Energy; and José Pineda, from the ANDE Workers’ Union (Sitrande) agree that the problem in Desde Paraguay is in the distribution of energy.
The largest investment in recent years has been in power transmission rather than distribution. Why? One reason that Encina, Cáceres and Pineda point out is that transmission works are a better business for bidding companies. “When we talk about transmission works, we talk about millions of dollars. When we talk about distribution, we talk about millions of guaraníes, ”explains engineer Encina. “It is a self-criticism that we do,” says Pineda de Sitrande. “Although now we begin to invest more in distribution. We need this level of investment for three or four more years. Engineer Fabián Cáceres calculates the need for an investment of 300 million dollars during that time, “understanding that yes or yes the vegetative growth must be covered, that people increasingly equip their houses. Also environmental laws, alternatives with less pollution.
Failure is public and also private
ANDE has a low execution of the money that should be for infrastructure. It used less than 40% of the budget it had to invest in 2019. The causes are various, such as that the state-owned company does not have independence to manage its budget and must pass each tender for Public Procurement. “It is the same bureaucracy to buy a ream of paper as a transformer,” says engineer Fabián Cáceres, a technician for the state-owned company. Being subject to Contracts makes possible suppliers protest or prosecute in each tender. “
The researcher and former minister Mercedes Canese explains that “doing all the purchases for a year makes sense if you are a ministry. But ANDE is forced to behave like a ministry to buy supplies that must be constantly renewed. In its charter, the company was defined as autarkic, but lost its status in 1990.
José Pineda de Sitrande illustrates the problem by pointing out what happens with innovation. «Technology in the electricity market is constantly being renewed. By the time we finish a tender, the product we buy is sometimes already obsolete, “he says. For Pineda, there is conflict between the need for transparency in hiring on the one hand, but also the need for agility. The solution that both he, Canese and Encina agree on is the creation of an entity, such as a Ministry of Energy, that verifies what ANDE spends on, but that allows the state company to use its resources more freely according to what was planned.
Encina rules out de-monopolizing or privatizing the entity as a solution. “ANDE is the public company that employs the most in the private sector. The failure of ANDE’s execution is also a failure of the private sector, ”says Encina. “It is thought that it is a statist company, but everything that is tendered for distribution goes to private companies. There is a lack of rigor in the control of the works ”. It limits the need for a more robust control to the times in which the works are carried out, a possible cause of not reaching the goals.
Without technicians, without state support or sufficient resources
ANDE suffers from a Schrödinger effect with the Paraguayan part of Itaipú. It is the owner and at the same time it is not. It is a long story that we tell in this special but, in summary, what must be understood is that ANDE buys energy from Itaipu. 60% of that fee is for a debt considered spurious, which comes from the initial loan for the construction of Itaipu, an energy subsidy to the Brazilian industry and a Wasmosy agreement to change the currency of what was owed, as explained by the political scientist and researcher Cecilia Vuyk. It is also a questioned debt. According to international audits, Paraguay has already paid it off. That debt is paid with your monthly bill and it is money that could go to investment.
On the other hand, ANDE does not receive the benefits of electricity rent, one of the country’s main exports. «The compensation of the Lugo-Lula agreement goes in funds co