REQUIRED FRAMEWORK AND POLICY CONDITIONS FOR

ENERGY AND WASTE MANAGEMENT TOWARDS

SUSTAINABLE DEVELOPMENT IN ECUADOR

by
Angel Daniel Avad Tapia
ID: 51207667
September 2009

Thesis Presented to the Higher Degree Committee of

Ritsumeikan Asia Pacific University
in Partial Fulfilment of the Requirements for the Degree of
Master of Science in International Cooperation Policy
In the context of the Dual German-Japanese Degree
Master of International Material Flow Management

Acknowledgements
To Michael Knaus, for unmercifully
criticising my work and thus helping me to
improve it.
To Prof. Dr. Peter Heck, for enlighten me
with the supreme vision of sustainable
development.
To others who believe in me.

ii

Certification
I hereby certify this document to be the original and authentic output of the authors
master thesis research work. All sources are duly listed, and mostly consist on published
scientific papers, international organisations reports and published books.

Angel D. Avad Tapia

Birkenfeld, Germany
June 2009

iii

Table of Contents
Abbreviations ...........................................................................................................................vi
Figures .....................................................................................................................................vii
Boxes ......................................................................................................................................viii
Executive summary ..................................................................................................................ix
Section I: Introduction and literature review on Energy and Waste ..................................... 10
1.

Introduction ................................................................................................................... 11

2.

Objectives and structure of the report .......................................................................... 13

3.

Energy policy and implementation ................................................................................ 15

3.1.

Energy in the world: sources, economics and projections .................................... 15

3.2.

Energy policy: efficiency and renewables .............................................................. 21

3.3.

Renewable energies: world status and trends....................................................... 27

3.3.1.
4.

A shift towards low-carbon energy systems: technology and financing ....... 34

Waste policy and implementation ................................................................................. 38

4.1.

State of the art of waste management .................................................................. 38

4.2.

Waste management in developing countries ........................................................ 40

Section II: Energy and Waste management in Ecuador: diagnosis and outlook.................... 44
5.

Introduction to Ecuador ................................................................................................. 45

6.

Current energy situation ................................................................................................ 47

6.1.

7.

Current energy policy ............................................................................................. 51

Potential for renewable and other sources ................................................................... 57

7.1.

Biomass, excluding municipal solid waste ............................................................. 57

7.2.

MSW and other waste streams.............................................................................. 58

7.3.

Photovoltaic and solar thermal .............................................................................. 60

7.4.

Hydroelectric .......................................................................................................... 61

7.5.

Wind ....................................................................................................................... 61

7.6.

Geothermal ............................................................................................................ 62

7.7.

Oil industry gas flaring reduction ........................................................................... 63

8.

The need for a National Energy Strategy in Ecuador ..................................................... 65

9.

A Framework for a National Energy Strategy in Ecuador .............................................. 68

9.1.

Regional/local initiatives under the NES ................................................................ 74

Current waste management situation and policy.................................................................. 77

iv

9.2.

Sector structure and policy .................................................................................... 77

9.3.

Characteristics of waste services ........................................................................... 80

9.4.

The need for a National Waste Strategy in Ecuador .............................................. 81

10.

Suggestions for a National Waste Strategy in Ecuador.............................................. 83

10.1.
10.1.1.

Financing ........................................................................................................ 87

10.1.2.

Management of different waste fractions ..................................................... 88

10.1.3.

Social issues: integration of informal actors .................................................. 90

10.2.
11.

Guidelines for IWMS under the NWS................................................................. 86

Potential for material and energy recovery from waste streams ...................... 92

Conclusions ................................................................................................................ 95

Section III: Appendixes and References ................................................................................. 98

12.

Appendixes ................................................................................................................. 99

12.1.

Status of renewable energy technologies: characteristics and costs ................ 99

12.2.

Alternatives to fossil fuels for heating and cooling.......................................... 100

12.3.

Kyoto Protocol and carbon markets, emphasis on developing countries ....... 101

12.3.1.

Carbon strategies under the Kyoto Protocol ............................................... 101

12.3.2.

World carbon trading and carbon funds ...................................................... 102

12.4.

Nature of policy instruments ........................................................................... 106

12.5.

Biomass to fuels conversion routes ................................................................. 108

12.6.

Approach for Regional Material Flow Management initiatives ....................... 109

12.7.

A timeline for renewable energies development under the NES .................... 113

12.8.

Case Study: Suggested approach for waste management in Guayaquil.......... 120

13.

12.8.1.

General information..................................................................................... 120

12.8.2.

Landfill .......................................................................................................... 121

12.8.3.

Waste collection........................................................................................... 125

12.8.4.

Waste separation and recycling ................................................................... 126

12.8.5.

Special wastes .............................................................................................. 127

12.8.6.

Improvement potential for the waste management in Guayaquil .............. 128

References................................................................................................................ 133

13.1.

Internet references .......................................................................................... 138

Abbreviations
BCF

Billion Cubic Feet

MFA

Material Flow Analysis

CCS

Carbon Capture and Storage

MFM

Material Flow Management

CDM

Clean Development Mechanism

(Kyoto Protocol)

MSW

Municipal Solid Waste

NES

National Energy Strategy

NGO

Non-Governmental
Organisation

OECD

Organization for Economic

Cooperation and Development

OPEC

Organization of the Petroleum

Exporting Countries

OTEC

Ocean Thermal Energy

Conversion

PE

Private Equity

PET

Polyethylene Terephthalate

POPs

Persistent Organic Pollutants

PPP

Public-Private Partnerships

PTS

Persistent Toxic Substances

PV

Photovoltaics

CER

Certified Emission Reduction

CIS

Commonwealth of Independent
States

CMM

Coal Mine Methane

CSR

Corporate Social Responsibility

CTL

Coal-to-liquids

EEG

German Renewable Energy Act

EPC

Energy Performance
Contracting

ESCOs

Energy Service Companies

GDP

Gross Domestic Product

GTZ

German Technical Cooperation

IEA

International Energy Agency

IGCC

Integrated Gasification
Combined Cycle

RDF

Refuse-Derived Fuel

IPO

Initial Public Offering

TOE

Tons of oil equivalent

IWMS

Integrated Waste Management

System

UCG

Underground Coal Gasification

UNDP

United Nations Development

Programme

UNEP

United Nations Environment

Programme

VC

Venture Capital

WHO

World Health Organisation

JI

Joint Implementation (Kyoto

Protocol)

LNG

Liquefied Natural Gas

LPG

Liquefied Petroleum Gas

vi

Figures
Figure 3-1: World electricity generation by fuel (left); World marketed energy use by fuel
type (right) ............................................................................................................................. 16
Figure 3-2: Power plant performance (mostly coal-fired) ..................................................... 16
Figure 3-3: World energy use in 2005 and annual renewable energy potentials (with current
technologies) .......................................................................................................................... 17
Figure 3-4: Fuel as proportion of the total generation cost .................................................. 18
Figure 3-5: Pros and cons of different electricity sources ..................................................... 19
Figure 3-6: A solar power-intense future energy mix ............................................................ 20
Figure 3-7: Alternative primary energy consumption scenario ............................................. 21
Figure 3-8: Final energy intensity and GDP per capita, 2006 ................................................. 24
Figure 3-9: Renewable energy share of global final energy consumption, 2006 (left) and
Share of global electricity from renewable energy, 2006 (right) ........................................... 29
Figure 3-10: Intensity of primary energy inputs and GHG emissions of gasoline Vs.
bioethanol .............................................................................................................................. 34
Figure 3-11: Global Investment in Sustainable Energy, by Type and Region, 2006............... 36
Figure 4-1: Solid waste management hierarchy .................................................................... 38
Figure 6-1: Effective capacity by type of generation, July 2008 ............................................ 47
Figure 6-2: Ecuadorian Energy Grid in 2007........................................................................... 49
Figure 6-3: National electric demand, first semester of 2008 ............................................... 51
Figure 6-4: Structure of the power market in Ecuador .......................................................... 53
Figure 6-5: Prices for renewable energies in Ecuador ........................................................... 54
Figure 7-1: Solar insolation in Ecuador (annual averages) ..................................................... 60
Figure 7-2: Geothermal sites and potentials in Ecuador........................................................ 62
Figure 9-1: Suggested National Energy Strategy for Ecuador ................................................ 74
Figure 10-1: Modalities of waste separation ......................................................................... 89
Figure 12-1: Global Carbon Credit Trading Volume, 2004-2008, US$ billions ..................... 103

vii

Figure 12-2: Examples of barriers and obstacles to the deployment of renewable energy
programs .............................................................................................................................. 110
Figure 12-3: Location of Guayaquil: satellite picture (left) and map (right) ........................ 120
Figure 12-4: Waste expectation at the landfill (1995-2020) ................................................ 121
Figure 12-5: Waste Composition at the Las Iguanas landfill of Guayaquil ....................... 122
Figure 12-6: Filter and pipe system for drainage ................................................................. 123
Figure 12-7: Gas flaring facility at the landfill of Guayaquil ................................................. 124
Figure 12-8: Catchment area of the landfill ...................................................................... 126
Figure 12-9: Purchase prices paid for materials REIPA ........................................................ 127
Figure 12-10: Recycling rate and value for waste picker organisation ................................ 129
Figure 12-11: Flowchart of the Recycling Centre Las Iguanas ............................................. 130
Figure 12-12: Earnings and Mass flows from the combined project in 2012 ...................... 131
Figure 12-13: Fermentation of 60% of the organic fraction of the Mechanical Separation 132

Boxes
Box 3-1: The international financial crisis and renewable energies ..................................... 20
Box 3-2: Technologies for cleaner conventional energy generation ..................................... 28
Box 3-3: Tidal and wave energy ............................................................................................. 31
Box 3-4: Controversy surrounding USA ethanol energy balance ........................................... 33
Box 3-5: Cellulosic ethanol or the future of ethanol production ........................................... 34
Box 3-6: Smart grids ............................................................................................................... 35

viii

Executive summary
The struggle for conventional development of emerging countries like Ecuador can be
replaced by the construction of a sustainable development oriented society. Two of the
main issues to be addressed by a country engaged in that path are the rationalisation of
energy and waste management, by means of a coherent body of policy instruments leading
to the creation of enabling conditions for the market to support sustainable practices.
This paper includes an extensive literature review on the current state of affairs of energy
and waste, including projections of future developments. It also describes the state of the
art of policy and practice of energy efficiency, renewable energies and waste management.
Then it analyses the Ecuadorian energy model and waste situation. It suggests policy
measures for its improvement towards sustainable development, via the creation of a
framework for the development of a National Energy Strategy, with emphasis on renewable
energies. An energy development model from 2009-2020 is also included to illustrate the
possibility of relying on renewable energies in the long term. It also suggests elements for a
National Waste Strategy, as well as for municipal integrated waste management systems; in
tune with the Ecuadorian reality and possibilities. A case study featuring an Integrated
Waste Management System for the city of Guayaquil is included.
Suggested policy measures and energy and waste approaches are based on the literature
review. Energy policy recommendations are based to a large extent on the set of policy
recommendations produced by the 2004 Bonn International Conference on Renewable
Energies, as well as on successful implementations in several countries; including: creation
of enabling institutions and conditions for diversification towards renewable energies,
integration of all policy instruments into a coherent body, exploitation of the Kyoto
Protocol mechanisms, etc. Waste policy recommendations are based on best practice
examples of other countries in the region and the world, nevertheless taking into account
the particularities of the Ecuadorian society; and including: application of the Waste
Hierarchy, material and energy recovery from waste streams, integration of scavengers and
kerbside pickers into new schemes, etc.

ix

Section I:
Introduction and literature
review on Energy and Waste

10

1. Introduction
Sustainability, or better sustainable development (definable as the theory and practice of
economic, social and environmentally sound anthropogenic systems), has been a
worldwide concern since at least 1972, when the desirability of its achievement was stated
as a principle by the UNs Stockholm Conference, and ratified in 1992 at the Rios World
Conference on Environment and Development.
Policy is considered one of the main pillars of sustainability, as well as technology and
activities aimed at integrating socio-economic principles with environmental concerns so
as to simultaneously;

maintain or enhance production/services (Productivity)

reduce the level of production risk (Security)

protect the potential of natural resources and prevent degradation of soil and water
quality (Protection)

be economically viable (Viability)

and socially acceptable (Acceptability) (FAO, 1993)

Sustainable development relies on several sustainability-related concepts: sustainable

energy, sustainable agriculture and sustainable consumption and production are among the
most representative, yet other concepts involved are sustainable building, sustainable
waste and water management, sustainable procurement, sustainable technologies and
sustainable transport, etc. In developing countries, energy, waste, agriculture and water
management are among the most critical aspects for development.
Energy security and especially electric independence is a priority for most governments.
Development based upon Gross Domestic Product (GDP) relies commonly on fossil fuelsdriven energy generation, frequently as a state monopoly 1 , whereas sustainable
development relies heavily on distributed, diversified and market-driven sustainable energy
generation schemes.
Waste constitutes, along with energy, water and raw materials; one of the main issues
every country should manage properly in order to develop in a sustainable way. Waste
1

For instance, in Ecuador and other Latin-American countries transmission infrastructure

belongs to the state, as well as large generation projects.

11

disposal is considered as a cost centre by governments, but waste could and should be
turned into a resource to generate business opportunities, materials, energy, employment
and other social improvements. Proper waste management is a matter of strategy and
righteous execution. Developing countries face institutional, legal, policy and economic
drawbacks resulting in poor waste management. Nevertheless, economic drawbacks can be
overcome in developing countries by means of policy-instruments, economic incentives,
business initiatives and social inclusion. Municipalities, usually in charge of the local waste,
must develop integrated waste management systems as to deal with waste collection,
treatment, valorisation, disposal, etc; in an economic, social and environmental way.

12

2. Objectives and structure of the report

The objectives of this report are: to propose policy-related suggestions for energy and
waste management in Ecuador and to describe suitable state-of-the-art policies,
technologies and potentials in those areas. The boundaries of the study are determined by
the country-specific potentials, the existing and intended technological capability and the
existing financial mechanisms available for Ecuador under the current geopolitical state of
affairs.
Methodologically, the report is based on literature review (secondary sources) and, where
applicable to specific topics, discussions with experts.
The report is structured as follows:

Literature review: state of the art of energy and waste policy and implementation

Energy management in Ecuador: diagnosis and suggestions

o

Description of current energy policy and practice

Description of potentials for renewable and alternative (i.e. associated gas

use instead of flaring) energy development

Structural suggestions for energy policy in Ecuador: introduction of a

framework for the creation of a National Energy Strategy and description of
regional/local energy initiatives under the suggested National Energy
Strategy

Waste management in Ecuador: diagnosis and suggestions

o

Description of current waste policy and practice

Structural suggestions for waste policy in Ecuador: introduction of a

suggested National Waste Strategy and description of Integrated Waste
Management Systems under the suggested National Waste Strategy

Description of the potentials for materials and energy recovery from waste
streams

Appendixes, featuring two case studies and assuming realisation of the suggested
national strategies
o

A timeline for energy efficiency and renewable energies development until

2020

A suggested approach for waste management in Guayaquil

13

The ultimate goal of this report is to show the possibilities for Ecuador to work towards a
Circular Economy2 by starting a reorganisation of two of the main economic, social and
environmental-impacting sectors of the society: energy and waste.

See Appendixes: 12.6 Approach for Regional Material Flow Management initiatives for a
definition.

14

3. Energy policy and implementation

3.1. Energy in the world: sources, economics and projections
According to the International Energy Outlook 2008, the worlds electricity consumption is
expected to increase 50 % between 2005 and 20303. Also, oil prices are expected to steadily
rise, after the temporary peak that took place in 2007-2008. That increasing demand is
expected to be satisfied mainly by liquid fuels (including biofuels), coal and natural gas (EIA,
2008). Those estimations are supported by the reports World Energy Outlook 2007: China
and India insights (IEA, 2007a); and World Energy Outlook 2008 (IEA, 2008)4.
Coal is and it is expected to continue being the main source of primary energy in countries
like China and USA, in the absence of national policies and/or binding international
agreements that would limit or reduce greenhouse gas emissions (EIA, 2008).
Nuclear energy generation is also expected to rise, as a reaction to the fossil fuel prices rise,
GHG emissions concerns and energy security topics (EIA, 2008). Besides, proven reserves of
uranium are estimated to be large enough to sustain nuclear energy for the next three
decades or more (IR59). Several European OECD countries, nevertheless, reject the
proliferation of nuclear energy, mostly due to its lack of sustainability (there is still no
proven solution for the proper disposal of radioactive waste) and negative popular opinion.
Such approach, combined with support for renewable and energy efficiency measures,
contributes to the OECD countries decoupling of growth and energy consumption.
Those reports, as depicted in Figure 3-1, do not foresee a dramatic increase of renewable
energies to the world energy generation (despite, for instance, the European Union targets
of achieving 20 % of renewable energies until 2020). They also predict poor investment in
biofuels and other renewable by country members of the Organization of the Petroleum
Exporting Countries (OPEC).
3

Demand increase is expected especially in countries outside the Organization for Economic
Cooperation and Development (OECD). China and India will be the main contributors to the
demand increase. South American countries are expected a 2 % annual increase (EIA, 2008).
Some observers consider the publisher of the International Energy Agency (IEA, the OECD
governments advisor in energy matters) to be partial and, while systematically underestimating
the potentials of some renewable sources of energy, promoting coal, oil and nuclear generation
as irreplaceable (IR51). For instance, the IEA estimates the share of renewable energies to the
total USA energy mix to keep below 13 % until 2030 (Worldwatch, 2009).

15

Figure 3-1: World electricity generation by fuel (left); World marketed energy use by fuel type (right)
Source: (EIA, 2008)

Other sources, like the World Energy Councils 2007 Survey of Energy Resources, agree with
the OECD official forecasts. The report states for instance that fossil fuels (especially coal)
will continue to provide more than 80 % of the total energy demand well into the future,
while predicting increasing importance of so-called clean coal technologies5 (see Figure 3-2)
and Carbon Capture and Storage (CCS) technologies.

Figure 3-2: Power plant performance (mostly coal-fired)

Source (WEC, 2007)

There is a wide range of estimations regarding the scope and speed of renewable sources
contribution to the global energy mix. The IEA estimates a 29 % share of renewable
energies in the global energy mix by 2030, while the Intergovernmental Panel on Climate
Change (IPCC) projects a 30-35 % share by 20306.

5
6

Like the Integrated Gasification Combined Cycle (IGCC) technology, explained in 3.3.
In combination with a carbon price of US$ 50/ton CO2eq.

16

The IEA also estimates that in order to cut the worlds dependency on oil and cut down CO2
emissions by half, US$ 45 trillion (1 % of annual global economic output) would have to be
invested in energy efficiency and renewable energy between today and 2050. That figure is
consequent with the generalised opinion that the transition from a fossil fuels-based
economy towards a sustainable, renewable-based economy involves a strategy that must
include two main aspects: energy efficiency (at the behavioural and technical levels) and a
shift to renewable energy sources (Worldwatch, 2009).
Currently, renewable energies contribute a significant and growing share of the worlds
energy generation. In 2007 renewable energy, including large hydro, generated more than
18 % of global electricity. At least 50 million households use the sun to heat water.
Renewable resources are universally distributed, as are the technologies. While much of the
current capacity is in the industrial world, developing countries account for about 40 % of
renewable power capacity and 70 % of existing solar water heating (Worldwatch, 2009).
Figure 3-3 depicts the potentials of renewable energies.

Figure 3-3: World energy use in 2005 and annual renewable energy potentials (with current
technologies)
Source: (Worldwatch, 2009)

Fossil sources of primary energy are still used (to a large extent and usually in a centralised
fashion) despite the potentials and technological development of renewable energies due
to several factors, including but not limited to the following:

Some renewable energy sources cannot compete in economic terms with coal, gas
and oil because infrastructure for conventional fossil-based generation is more

17

mature, is supported by historical reasons, is perceived as cheaper (when

environmental costs are not internalised) and profits out of economies of scale;

In some biomass applications, as well as in conventional generation technologies,

the input substrate itself contributes largely to the total cost of generation (Figure
3-4 lists the contribution of inputs to the total electricity generation costs of various
energy sources);

Figure 3-4: Fuel as proportion of the total generation cost

Source: (RAB, 2006)

Energy security, economies of scale and availability of inputs are perceived as more
reliable for fossil fuels-based generation;

There are great economic interests tied to conventional fossil fuels-based

generation.

Despite those facts, renewable energies are promising, environmentally sound, and can be
economically competitive and even better than fossil-based energies. See Figure 3-5 for an
assessment of various electricity sources.

18

Figure 3-5: Pros and cons of different electricity sources

Source: (Worldwatch, 2009)

Will ever renewable energies be considered as cheaper, advantages of decentralised

generation based on renewables acknowledged, or sustainability considerations deemed
decisive as for an energy revolution towards clean energy? Perhaps rising oil prices, rising
pro-environmental public opinion, spreading of sustainability practices, new technological
developments and economic events (i.e. the ongoing financial crisis, see Box 3-1) will
contribute for a shift from the current fossils-dominated global energy mix towards a lowcarbon one.
As of March 2009, and since September 2008 (bankruptcy of Lehman Brothers), a process that
7

started in early 2007 with the mortgage crisis in USA has affected all economies in the world.
Nowadays it is called the Financial Crisis, and its impact on energy markets, renewable
energies and other energy-related aspects is subject to controversy. For instance, one
business education service to the gas and electric industry suggests once the markets resettle, the financial crisis might benefit the energy business, because of consolidation
opportunities and cheaper assets, governmental invests and the generalised opinion that the

A comprehensive timeline can be found in http://timeline.stlouisfed.org/index.cfm?p=timeline.

19

energy business is more secure for private investors (IE52).

Regarding renewable energies, many international sources agree that the financial crisis could
have a positive impact on the development and deployment of new initiatives. Nevertheless,
some sources consider the crisis will reduce energy research and in general favour cheaper yet
emissions-intensive energy (IE53). The immediate effect of the crisis in renewable energies is a
contraction of investment. A recent press release states that investment in renewable
st

th

energies in the 1 quarter of 2009 is at least 44 % lower than the 4 quarter of 2008 and 53 %
st

below the 1 quarter of 2008 and, therefore, recession and credit crunch finally reached
investment in renewable energies, low-carbon technologies and energy efficiency (IE57).
Box 3-1: The international financial crisis and renewable energies

It is foreseen by several sources that in future (post 2050) renewable energies will increase
in importance, due to fossil fuels availability and prices and to technological development
and increasing environmental awareness and pro-sustainability public opinion. For instance,
Figure 3-6 depicts a possible and interesting (yet not ideal) evolution of the global energy
mix until 2100.

Figure 3-6: A solar power-intense future energy mix

Source: (WEC, 2007)

20

Some sources of energy outlooks are more optimistic, for instance, the energy [r]evolution:
A Sustainable World Energy Outlook report suggest a far more sustainable energy future
than the mainstream projections, as depicted in Figure 3-7. For such a scenario to be
possible, a number of assumptions would have to be fulfilled (EREC, 2007):

internalisation of external costs of fossil fuel-based electricity generation;

re-focusing of subsidies from fossil fuels and nuclear energy to renewable energies,
and lowering the market barriers for renewable;

guarantee (priority) access to electricity grids to renewable-based generation, and

implementing renewable quotas;

engage (all countries) in either domestic emission-curbing policies or international

legally-binding emissions limiting agreements;

apply stricter efficiency standards for industrial and household consumption,

buildings and vehicles.

Figure 3-7: Alternative primary energy consumption scenario

Source: (EREC, 2007)

3.2. Energy policy: efficiency and renewables

Energy efficiency is an issue to be taken into account at the micro and macroeconomic
levels due to several reasons: Kyoto protocol objectives8, energy prices and constraints in
energy supply. Developed countries are driven towards efficiency by a combination of
factors such as environmental and supply constraints, cost competitiveness, consumer
awareness, etc. Developing countries, in the other hand, are generally driven in the same

Namely, emissions reductions mainly via international investment in GHG emissions-curbing

projects. See Appendixes: 12.3 Kyoto Protocol and carbon markets, emphasis on developing
countries.

21

direction mainly by economic reasons (dependency on oil imports, use of existing supply,
etc). Energy efficiency measures, for instance regarding electricity, would yield the
following main benefits: supply more consumers with the same capacity, avoid peakrelated need for generating capacity increase and reduce the growth speed of electricity
demand and its related required investment (WEC, 2008).
Several aspects intervene in energy efficiency (understood as a reduction in the amount of
energy used for a particular task, service, level of activity), being some technological and
others non-technological: organisational, management, education-related, etc. It is
considered that certain market conditions are to be present for energy efficiency to be
voluntarily sought by consumers. Such conditions include availability of efficient
technologies and appliances, information about those artefacts and commercial plus
financial services related to them. When the information is missing or partial, overall costs
of energy services are not transparent to the consumers, and financial constraints by
consumer prioritise immediate costs of hardware; then implementation of policy measures
is justified (WEC, 2008).
Since the industrial sector represents over 1/3 of both global primary energy use and
energy-related CO2 emissions (for instance, the portion of the energy supply consumed by
the industrial sector is often superior to 50 % in developing countries), industrial energy
efficiency is a main concern worldwide. The list below is representative of the reasons for
industries to engage in energy efficiency (UNIDO, 2007):

Cost reduction;

Improved operational reliability and control;

Improved product quality;

Reduced waste stream;

Ability to increase production without requiring additional, and possibly constrained,

energy supply;

Avoidance of capital expenditures through greater utilization of existing equipment

assets;

Recognition as a green company; and

Access to investor capital through demonstration of effective management

practices.

22

The most common policy instruments used towards energy efficiency are the following
(WEC, 2008):

Labelling and energy standards for electrical appliances (i.e. Energy Star).

Price signals to induce consumers to change behaviour or purchase energy efficient

hardware.

Establishment of energy efficiency agencies, aimed to deliver technical advice to

consumers and policy evaluations to policy makers.

Building codes, including retro-active requirements for existing buildings. Also, for
instance, regulations imposing the use of solar energy on new buildings.

Financial incentives; more focused on tax exemptions (i.e. tax credits, tax
reductions and accelerated depreciation) than on direct subsidies (which are useful,
for instance, as tools to create preliminary conditions for the market to adapt
smoothly to upcoming policies).

Information tools, such as general information campaigns, labelling of appliances,

dwellings rating by energy performance, audits, local information centres,
comparative information (benchmarking), etc. Audits are becoming increasingly
mandatory for buildings and industrial energy consumers.

Energy efficiency obligations, to change the utilities business model from energy
sellers to energy services sellers.

Energy Service Companies (ESCOs) and Energy Performance Contracting (EPC) are
very attractive mechanisms to capture cost-effective energy-efficiency potential
worldwide, mainly because they do not involve either public expenditure or market
intervention.

Transportation-aimed measures, such as car purchase taxes, fuel taxation, road

pricing, CO2/energy efficiency labelling; car Inspection, maintenance and scrapping
programs; support or mandating for biofuels consumption,

Policy instruments for industrial energy optimisation, under the Industrial

Standards Framework9 (UNIDO, 2007). Such instruments would stimulate energy
initiatives involving: by-products and excess heat synergies between processes;

The Industrial Standards Framework introduces a standardized and transparent methodology

into industrial energy efficiency projects and practices including: system optimization, process
improvements, waste heat recovery and the installation of on-site power generation. The
Framework builds on existing knowledge of best practices using commercially available
technologies and well-tested engineering principles (UNIDO, 2007).

23

optimisation of pump, compressed air and heat systems; exploitation of plant

design constraints (i.e. maintain limiting machines working close to 100 %, to
minimise unused capacity and maximise plant output), etc.
European countries lead the implementation of energy efficiency measures, while the
former Soviet Union countries10, the Middle East and Africa feature the worst energy
intensity 11 ratios (WEC, 2008). It is also observable that both oil imports dependant
developing countries and oil exports dependant countries in general feature high energy
intensity, as shown in Figure 3-8.

Figure 3-8: Final energy intensity and GDP per capita, 2006
Source (WEC, 2008)

Industrial energy efficiency faces specific barriers, namely: systems optimisation for energy
efficiency is mostly learned through case-specific experience; plant engineering initiatives
often lack management support; and industrial optimisation must be a continuous process,
since achieved efficiency gains usually diminish over time. Those considerations lead to at
least two conclusions (UNIDO, 2007):

10
11

Currently known as the Commonwealth of Independent States (CIS).

Energy intensity is a measure of a countrys energy productivity, and is calculated on the base
of national statistics, to show the amount of energy required to create one unit of GDP.

24

Energy efficiency should be integrated within existing management systems, for

instance, linking ISO 9000/14000 quality and environmental management systems
and industrial energy efficiency.

Energy-related target-setting agreements for an industrial sector or the national

industry in general should be made. The most effective agreements are those that
are legally binding, set realistic targets, include sufficient government support
often as part of a larger environmental policy package, and include a real threat of
increased government regulation or energy/GHG taxes if targets are not achieved.
Overall, international experience shows that target-setting agreements are an
innovative and effective means to motivate industry to improve energy efficiency
and reduce related emissions, if implemented within a comprehensive and
transparent framework (UNIDO, 2007).

A number of market and policy mechanisms have been developed over time to make
renewable interesting for investment. The top approach is the promotion mechanism
practiced by Germany and Europe in general, based on feed-in laws and renewable energy
acts. Those mechanisms basically guarantee grid access and competitive prices for
renewable energy generators, and those initiatives-derived CO2 avoidances are counted
towards the national targets. For instance, in Germany, [] approximately 60 million tons
of CO2-equivalents, more than 7 % of Germanys total CO2-emissions, were avoided through
Renewable Energy Act (EEG) installations in 2007 (Langni, 2008).
For certain regions and applications, decentralised renewable generation units based on
locally-available resources are the best choice, while in others large-scale centralised
renewable generation initiatives yield better results12. Policy tools should support both
approaches in such a way that the opportunities are exploited by institutional and private
investors. Countries which have achieved a growing renewable sector usually feature a
national energy strategy, and develop policy instruments in compliance and support of such
strategy.
In developing countries, renewable energies promotion and development is pursued or
should be pursued in the context of an overall energy sector reform, aiming to overcome
12

For instance, credit and electrical infrastructure conditions have historically determined in
Ecuador that large hydropower projects can be only undertaken by the state, while in Germany
distributed smaller-scale biogas-fueled electricity generation is widespread.

25

several structural traits. For instance, goals of energy sector reforms in Latin America are to
(HERA, 2002):

Improve energy efficiency and lower costs,

encourage private investment and abolish states monopoly of the sector,

extend coverage of electric services,

protect the environment,

maximise government revenues (as opposite to the extended practice of

subsidising energy at loss),

improve service quality,

improve consumer-side energy efficiency, etc.

A number of technical, institutional and political constraints curb those initiatives. Best
practice examples in the region suggest that in order to improve the energy sector, a logical
sequence of steps should be followed: establish a sound regulatory framework, restructure
government assets, and organize market rules before privatization occurs and private
investments are encouraged. Also it is recognised that when reforming aspects of the
national energy structure, distribution should be addressed before generation, and once
distribution is commercially viable, competitive wholesale electric markets can be
organised. The underlying idea of that sequence is to provide clear signals for investors to
trust the reforms and engage in initiatives. At the same time, it is considered to allow a
better definition of the governments role in the creation of an enabling environment and
protecting the national interests (HERA, 2002).
To sum-up, the following main initiatives for energy efficiency and maximum exploitation of
renewable energy possibilities are recommended at the public and private levels13:

Deploy solar applications (PV, solar thermal) on every suitable building, at least
aiming to cooling and heating.

Further develop and spread to the largest possible extent of passive and activehouse types of building.

Large scale renewable-based generation, but also smaller, decentralised generation

schemes where applicable and/or no alternatives available.

Intelligent energy supply control systems and economic tools, as to reduce demand
peaks and orchestrate supply by prioritising renewable-based offer.

13

Partially based on (Worldwatch, 2009).

26

Create enabling environments (i.e. policy instruments) for renewable energies to

boom. Integrate renewable energies promotion initiatives within overall national
energy strategies and/or integrated environmental approaches, including waste,
water, energy, etc (UNEP, 2009). Practiced renewable energies promotion policies,
besides feed-in laws, include (REN21, 2007):
o

Renewable portfolio standards

Capital subsidies, grants, or rebates

Investment or other tax credits

Sales tax, energy tax, excise tax, or VAT reduction

Tradable renewable energy certificates

Energy production payments or tax credits

Public investment, loans, or financing

Public competitive bidding.

Some pre-conditions are considered as necessary for policy and market measures to
succeed, among them: incentive prices, an stable institutional framework, systematic set of
measures rather than isolated ones; planning, enforcement and periodical strengthening of
regulations; creation of public-private partnerships (PPP) to reinforce the effect of public
policies, public sector leading by example, integration of energy efficiency policies within
other sector policies (for instance, within a national energy strategy), etc (WEC, 2008).

3.3. Renewable energies: world status and trends

The worlds economy needs energy, as cheap as possible, but also societies have
acknowledged the need for sustainable energy to impact as few as possible the natural
systems that support societies. Therefore, while developing renewable energies,
technological improvements are also developed for conventional polluting energy
generation, as to minimise its impact on the environment (see Box 3-2).
Some developments towards reducing emissions from conventional fossil-based energy
generation (WEC, 2007):

Coal-to-liquids (CTL) industry, developed in coal-rich countries to minimise the impact

on their economies of international oil prices.

Clean coal technologies, centred in optimising plant performance and CO2 capturing,
like for instance, the Integrated Gasification Combined Cycle (IGCC), a coal power

27

advanced technology under which coal is not burnt to produce steam, as

conventionally done, but instead reacted into syngas (hydrogen and carbon
monoxide-based biomass synthesis gas). A gas turbine is then used to generate
electricity, and waste heat recycled to produce steam for a secondary steam turbine.

CCS technologies, whereby CO2 is removed from flue gases (from power generation
and some industrial activities) and injected underground, for instance, into deep
saline aquifers. The IPCC estimates a worldwide storage capacity of at least 2 000
billion tons of CO2.
o

CCS technologies and better transportation technologies for natural gas,

combination with renewable technologies, as well as reduction towards
14

elimination of gas flaring are being considered and recommended for a

more sustainable use of gas.

Recovery of Coal Mine Methane (CMM), a relatively large and undeveloped resource.
Coal mines are main sources of methane emissions, and it is estimated that by 2020
CMM emissions will be in the order of 449 Mt CO2e.

Underground Coal Gasification (UCG), a technology that allows gasification in situ of

non-mined coal resources (due to economic or geological reasons) as well as CO2 reinjection into the ground.

Preliminary studies suggest UCG applications could

potentially increase world reserves by 600 billion tons.

Some experts consider oil shales (deposits of sedimentary rocks containing fossil oil
and combustible gas) to be the next source of oil once the existing reserves are
depleted. Currently, technology exists for oil shales exploitation, but environmental
impact of its industrial application would be great. Other experts consider oil sands
containing bitumen and extra heavy oil as of great potential, since the volume of oil
in such presentation seems to be of at least equivalent to the volume of original oil
existing in known conventional oil accumulations.
Box 3-2: Technologies for cleaner conventional energy generation

Renewable technologies15 often depend to a certain extent on promotion policies and

supporting market mechanisms such as voluntary or mandatory emissions constraintsderived carbon trading, for instance, Kyoto Protocols Clean Development Mechanisms
(CDM) and Joint Implementation (JI). Also, a number of market enabling institutions and
14

15

Each year over 115 billion m are flared worldwide (about 40 billion m only in Africa. Gas
flaring is considered to add about 390 million tons of CO2 emissions per year.
Current status of renewable energy technologies is depicted in Appendixes: 12.1 Status of
renewable energy technologies: characteristics and costs.

28

organisations worldwide, national, international, private, PPP, public, etc; contribute with
technical and financial support to the further development of renewables (REN21, 2007).
Figure 3-9 depicts the current shares of contribution of renewable energies to the worlds
consumption.

Figure 3-9: Renewable energy share of global final energy consumption, 2006 (left) and Share of global
electricity from renewable energy, 2006 (right)
Source: (REN21, 2007)

The renewable energy landscape changes continuously. In 2007, over US$ 100 billion was
invested worldwide in additional renewable energy-related capacity, manufacturing plants,
and research and development. Below, some highlights of the current trends in renewable
energies (REN21, 2007):

Renewable electricity installed capacity reached an estimated 240 GW worldwide in

2007, an increase of 50 % over 2004. Renewables represent 5 % of global power
capacity and 3,4 percent of global power generation (not considering large
hydropower, which alone represents 15 % of global power generation).

Renewable energy sources, considering large hydropower, generated in 2006 more

electricity than nuclear.

The largest individual technology contributing to renewable generation capacity is

wind power, which grew by 28 % worldwide in 2007 to reach an estimated 95 GW.

The fastest growing energy technology worldwide is grid-connected solar

photovoltaics (PV), with 50 % annual increases in cumulative installed capacity in
both 2006 and 2007, to an estimated 7,7 GW. This represents 1,5 million
households with rooftop PV grid-connected installations in the world.

Existing solar hot water/heating capacity increased by 19 % in 2006 to reach 105

GWth globally. Rooftop solar heat collectors are used for water heating in nearly 50

29

million households worldwide, and space heating to an increasing number of

homes.

Geothermal energy is increasingly being used in the world. For instance, in 2004 the
worldwide use was about 55 TWh (for electricity) and 76 TWh for direct use
(heating, bathing). Among renewable sources, geothermal competes with
windpower in terms of installed capacity and share of electricity generation. Plants
are highly reliable, reaching capacity factors of over 90 % and suitable for both
base-load and peak power plants. More than 2 million geothermal-powered heat
pumps are used in 30 countries for building heating and cooling.

Renewable energy sources provide electricity, heat, mechanic power and water
pumping for millions of people in rural areas of developing countries. Biogas alone
provides light and cooking power for 25 million households, while 2,5 million
households use PV lighting systems.

Developing countries hold over 40 % of existing renewable power capacity, more

than 70 % of existing solar hot water capacity, and 45 % of biofuels production
(mainly Brazil).

Many countries, regions and cities have introduced targets and quotas for
renewable, including CO2 emissions reductions, solar thermal and PV applications,
biodiesel blends, directives for public green energy procurement, etc.

A large percentage of energy generated is used for heating and cooling purposes,
both at industrial and household levels. Many renewable substitutes for fossil fuels
are available to address heating/cooling needs16.

The Ocean Thermal Energy Conversion (OTEC) technology exploits the temperature
difference between different layers of ocean waters, in tropical and sub-tropical
areas. A 20 C difference is considered as sufficient for OTEC. There are several
technology varieties of OTEC, and it has been estimated that certain floating OTEC
plants would actually result in net CO2 absorption. OTEC technology can be useful
for base load generation, due to the almost constants deep-sea temperature
conditions. Investment is slowly flowing towards OTEC, after some successful
demonstration projects.

Tidal and wave power are ocean-based energy sources yet untapped, but under
research and demonstration stages of development (see Box 3-3).

16

See Appendixes: 12.2 Alternatives to fossil fuels for heating and cooling.

30

Tidal generation is based on the exploitation of tidal currents and the tide-induced cyclic rise
and fall of sea level (tidal range). Only certain points in the planet are suitable for such
activities, where tidal ranges are broad enough. Development of tidal barrage systems (for
tidal ranges) is constrained by high costs, and it is foreseeable that such facilities would be
combined with road and rail crossings, to optimise cost/benefit. Full-scale prototype tidalcurrent systems are being deployed in several sites, and will determine the future of that
technology.
Wave generation is the harvesting of the kinetic energy of waves, originally derived from solar
radiation. Several technologies are in R&D stage, with only a fraction of them being tested.
Wave energy is still quite immature, and there is no consensus on a definitive technology.
Box 3-3: Tidal and wave energy

Biomass-to-energy and waste-to-energy are two important trends in energy

generation, given the immense availability of several biomass sources: wood, crop
residues and silage, animal husbandry residues, energy crops, organic leftover from
domestic, commercial and industrial processes; organic fraction of municipal solid
waste (MSW), sewage sludge, etc. Biomass can be used as a source of various types
of energy carriers 17 , namely wood-derived fuels, biogas, biofuels, syngas,
combustible oil, etc.

Energy recovery from biomass and waste yields several benefits: renewable energy,
soil protection (in some cases, for instance by growing Jatropha for plant oil), CO2
sinks, reduction of waste to de landfilled, etc. Biomass and waste use as energy
sources is widely practiced in the world. The top biomass using countries are USA,
Germany and Brazil, adding together more than 45 % of the total generation
(REN21, 2007). Among the most common applications, the following are practiced
worldwide:
o

Anaerobic digestion of biomass for biogas production to be fed into

Combined Heat and Power (CHP) engines.

Biomass and waste direct incineration for energy recovery via steam
generation and heat exchange.

17

See Appendixes: 12.5 Biomass to fuels conversion routes for a relation of various biomass to
fuels conversion routes.

31

Co-firing of biomass and waste with coal, for generation and industrial
purposes.

Gasification and pyrolysis of biomass and waste into combustible syngas.

Distillation of sugar and starch-rich biomass into alcohols.

The global contribution of biomass sources to the worlds energy generation in

2005-2006 was as follows (REN21, 2007):

Thermal applications of wood energy: 18 EJ of primary energy;

Black liquor: 2,7 EJ of primary energy;

Charcoal: 1,4 EJ of secondary or product energy;

Ethanol: 1,1 EJ of secondary or product energy;

Electricity: 0,65 EJ of secondary or product energy;

Biodiesel: 0,3 EJ of secondary or product energy.

One of the main biomass-to-energy applications is production of biofuels (ethanol

and biodiesel), which exceeded an estimated 53 billion litres in 2007, a 43 %
increase against 2005. Ethanol production represented in 2007 around 4 % of the 1
300 billion litres of gasoline consumed globally. Annual biodiesel production had
increased by more than 50 % in 2006, especially in Brazil and USA (REN21, 2007).
There is a public controversy regarding the real impacts of ethanol production and
utilisation (See Box 3-5).
In general, ethanol from sugar cane, in the Brazilian context, is widely accepted to have a
positive energy balance, while ethanol from corn in the USA context is subject to ongoing
discussion regarding its energy balance (depending on the assumptions ranges between
slightly negative to slightly positive).
The majority of scientist in the United States, and from other countries discussing USAs
ethanol (i.e. Pimentel, Shapouri, Wang, etc), found out that the net energy balance of corn
ethanol ranges from negative to slightly positive, but improving over time due to the energy
credits gained from by-products, modern production facilities, normal corn yields and lower
energy use per unit of output in the fertilizer industry as well as advances in fuel conversion
technologies (USDA, 2002).
Since no clear environmental, economical and social advantages of ethanol from corn and
sugar cane can be proven and are also not considered to significantly contribute to a shift
from fossil resources, more efficient and sustainable solutions have to be developed. For
instance, one of the most promising developments in the field of ethanol production is the

32

utilization of lignocellulosic feedstock for ethanol production, currently under intensive

research to overcome the technical obstacles of lignine digestion.
Box 3-4: Controversy surrounding USA ethanol energy balance

Biofuels researchers suggest the future of ethanol lies on cellulosic ethanol,

obtainable from numerous (often waste) materials (See Box 3-5).
Since cellulosic ethanol can be obtained from lignocellulosic feedstocks such as straw, wood
residues, greenery waste, miscanthus, switchgrass, paper, or cardboard; this kind of ethanol
features several advantages as compared to conventional ethanol from corn, soybean or sugar
cane and beets (Farrel, 2006):

the possibility to use residual and waste materials offers a widespread availability
and abundance;

lignocellulosic materials do not compete with food production and no precious

agricultural land is necessary for the cultivation since no special soil qualities are
required;

intensive agriculture is not necessary;

utilization of the entire plant materials; and

low cost of raw materials.

possibility of energy recovery from lignin for the distillation process and heating
energy.

Lignocellulosic materials are composed of cellulose (C6-sugar, glucose), hemicellulose (C5sugar, xylose and arabinose), and lignin. Due to the fact that hemicellulose (C5-sugar) is not
directly fermentable, special production processes including a pre-treatment have to be
implemented in order to make use of the entire energy content of the specific feedstock.
After the pre-treatment which liberates the cellulose from its lignin seal and turns the
hemicellulose into individual, fermentable sugars through an acid hydrolysis, special yeast
cells are necessary to ferment the glucose, xylose and arabinose. The fermentation is followed
by a distillation process in order to separate ethanol from remaining water (Farrel, 2006).
Overall, cellulosic ethanol achieves a five times better energy balance than corn ethanol and
also offers a more realistic chance to substitute considerable amounts of fossil fuels in the
future. The main barrier for its spreading is that, up to now, no cost-effective production
process has been developed; and thus costs for pre-treatment technologies and for research
and development of the specialised yeast cells for fermentation remains high (Farrel, 2006).

33

Figure 3-10 shows the intensity of energy inputs per MJ of fuel as well as of the net GHG
emissions per MJ of fuel of standard gasoline Vs. several bio-ethanol types.

Figure 3-10: Intensity of primary energy inputs and GHG emissions of gasoline Vs.
bioethanol
Source: (Farrel, 2006)
Box 3-5: Cellulosic ethanol or the future of ethanol production

3.3.1. A shift towards low-carbon energy systems: technology and

financing
Globally, the following renewable energy sectors have been pointed to as key by the 2009
World Economic Forum at Davos: on-shore and off-shore windpower, PV, solar thermal for
electricity generation, MSW-to-energy, sugar-based ethanol, cellulosic and next generation
biofuels; and geothermal power (WEF, 2009). Those renewable energy sources are
considered to contribute to a world-wide shift from fossil fuelled, polluting energy systems
to low-carbon energy systems.
In addition, several enabling tools/approaches have been developed to facilitate the shift to
a low-carbon, more sustainable energy system worldwide: financial tools, feed-in laws and
other policy instruments, energy efficiency, smart grids, cheaper energy storage18; and CCS
technologies to reduce the environmental impact of fossil fuels-based generation (WEF,
2009).

18

Currently, the cost of storing 1 MWh of electricity ranges from US$ 50 to US$ 180, depending
on the technology used

34

Development of renewable energies should be combined with other tools, as to make the
shift possible. For instance, renewable decentralised generation is combinable with smart
grids as for peak curbing, as explained below:

One of the main issues of electric generation and distribution is the occurrence of
peaks, time or event-driven surges in demand that force electricity generators
and distributors to develop additional installed capacity.

Renewable generation, due to its frequently distributed nature, is quite useful

to, in combination with other peak-curbing measures such as habits change,
contribute to peak demand fulfilment.

Renewable energies ideally would be used for base load demand, while
conventional generation to compensate peaks, but in practice, and by means of
intelligent grids or smart grids, renewable energies can act as buffers and
compensation resources for a regions electric supply management. See Box 3-6 for
insights on smart grids.
Intelligent grids are electric grids improved with smart metering devices, bi-directional
communication (to pulls and push telemetry data) and advanced control systems and
applications (IR56). Smart grids are sensible systems which can self-regulate and re-distribute
power from excess points to deficit points. They allow large scale and small/distributed
renewable generation facilities to be connected, and use them as peak-compensating
mechanisms. It has been described that, if electric vehicles are massively integrated within
intelligent grids, the vehicles can serve as both consumers and providers, when they sell back
to the grid (on profit) the electricity stored in their batteries, when the grid is at deficit (IR56).
Additional mechanisms can be used with smart grids and smart devices, for instance, to relate
the level of consumption to a predefined per kWh rate, and consequently turn off and on user
devices according to peak load conditions.
Box 3-6: Smart grids

Carbon markets, mainly derived from the Kyoto Protocol, constitute one of the main
financial tools for the shift. The underlying idea is to price carbon (emissions), as a way to
stimulate low-carbon technologies, strategies, projects and, ultimately, investment19.

19

For an understanding of carbon markets and Kyoto Protocol, see Appendixes: 12.3 Kyoto
Protocol and carbon markets, emphasis on developing countries.

35

Carbon markets and other mechanisms, combined with public awareness, etc; have
boosted investment in renewable and efficiency technologies and initiatives. Investment in
renewable energies was US$ 70,9 billion in 2006, which represents a 43 % increase with
respect to 2005 (UNEP, 2007). Other sources mention an overall investment of US$ 93,3
billion in 2006 and US$ 148,4 billion in 2007 (WEF, 2009). Nevertheless, investment in
renewable is still policy-driven worldwide, and many countries feature specific and selective
market supporting mechanisms (i.e. EUs feed-in laws, USAs and Brazils biofuels programs).
Energy efficiency is also a growing investment target, attracting US$ 1,1 billion in 2006
(UNEP, 2007).
From early 2009, the world financial crisis has reached the sector, and investment has
contracted (IR57). Nevertheless, as of February 2009, from the approximately US$ 2,8
trillion in stimulus packages deployed globally, more than US$ 430 billion are related to
solar, wind, energy-efficient solutions, power storage, biofuels, carbon trading, diversified
renewable, investment companies and building insulation (HSBC, 2009). Figure 3-11
indicates the global investment in sustainable energy by type and region for 2006.

Figure 3-11: Global Investment in Sustainable Energy, by Type and Region, 2006
Source: (UNEP, 2007)

36

To summarise, among the top state of the art concepts and related technologies,
approaches and policies (especially in Europe, leading region in terms of energy
management), the following contribute to an important extent to the shift to low-carbon
energy systems:

Carbon trading

Feed-in laws

Intelligent grids

Promotion of waste-to-energy, certain variations of biomass-to-energy, windpower,

geothermal, solar thermal applications and PV.

37

4. Waste policy and implementation

4.1. State of the art of waste management
Europe leads the policy and practice of waste management in the world, by demonstrating
in practice that waste management can be not only an economically productive activity, but
also that it can be performed in an environmentally sound way and that the whole society
of a region can be involved.
It is widely accepted that the best approach to waste management relies on the waste
management hierarchy (depicted in Figure 4-1; other versions mention avoidance
/prevention before source reduction or minimisation). This sustainable hierarchy suggests
waste should be addressed as a source of resources, both materials and energy, and that
the whole societys involvement is required for proper waste management.

Figure 4-1: Solid waste management hierarchy

Source: (IR35)

Among the most common state of the art concepts and related technologies, approaches
and policies practiced (especially in European and other developed countries, and in
compliance with the waste management hierarchy), the following are top notch:

Integrated environmental approaches, including waste, water, energy, etc (UNEP,

2009).

38

3R initiatives via policies and public awareness/education, resulting in: take-back

systems, implementations of the polluter-pays principle, Design for Recycling,
Extended Producer Responsibility, etc (IR55).
o

Legislation and Corporate Social Responsibility (CSR) concerns had led main
companies (especially trans-nationals with presence in Europe) to engage
in more sustainable production, resource use and waste management. A
manifestation of that attitude is the theory and practice of Design for
Recycling.

Separation at the source is achieved by a combination of legislation and

enforcement, environmental education and civic commitment.

Waste to energy, the concept of gaining energy from waste and at the same time
reducing volume before disposal. Two main implementation of such principle are
anaerobic digestion of solid waste and sewage sludge and incineration of waste
with energy recovery. Other conversion technologies for energy recovery include
pyrolysis and gasification, both aimed to obtain syngas (IR54). Those technological
approaches yield electricity and excess heat (which can and should be used for
applications, i.e. industrial purposes).

Policy (and its enforcement) is the main enabling factor for sustainable waste management.
There are many waste management programs in the world being financed and/or
promoted by main international institutions20, and reflecting those institutions policy
approaches to waste management (involving the waste management hierarchy). Among
the policy recommendations promoted by those institutions are the following (UNEP,
2009):

Supporting the 3R Initiative, adopted at the G8 Summit in 2004 and officially

launched at the 3R Ministerial Conference in Tokyo in 2005 to promote the
importance of reduce-reuse-recycle (3R) for sustainable development.
o

20

Promoting Cleaner Production.

Main international institutions engaged in waste management initiatives are: Asian

Development Bank (ADB), European Bank for Reconstruction and Development (EBRD),
Organization for Economic Cooperation and Development (OECD), Secretariat for Basel
Convention (SBC), United Nations Development Programme (UNDP), United Nations
Environment Programme (UNEP), United Nations Human Settlements Programme (UNHABITAT), United Nations Industrial Development Organization (UNIDO), World Bank (WB), etc.

39

Building capacity, via intensive training packages, for local governments on

development and implementation of Integrated Waste Management Plans
with focus on 3R.

Supporting policy frameworks to promote Integrated Solid Waste Management

(see 10.1 Guidelines for IWMS under the NWS).
o

Encouraging the creation of National Waste Strategies, as to make possible

the enabling environment and policy situation necessary for sound waste
management systems.

Encouraging and supporting integrated solutions for environmental issues,

such as Sustainable Materials Management (SMM), featuring integrated
material, product and waste policies and addressing environmental impacts
over the whole life-cycle of materials and products.

Regulate trans-border transportation of waste, including harmonisation

between the OECD control system and the Basel Convention guidelines.

Supporting the creation of commercialised structures based on full cost recovery

for operations and maintenance.
o

Supporting

demonstration

projects,

especially

on

waste-to-energy

initiatives and methane capture systems.

o

Improving urban waste management, with focus on the collection and

disposal of municipal and industrial solid wastes.

Financing a large varied portfolio of solid waste initiatives.

4.2. Waste management in developing countries

Waste management in developing countries, and even in some economies in transition, is
characterised by four main traits: inadequate service coverage and operational inefficiency
of services, limited and usually informal recycling, final disposal without energy or material
recovery, and inadequate management of hazardous and healthcare waste (Zurbrugg,
2003).
Moreover, the main characteristics of solutions usually proposed and implemented in
developing countries are the following (Medina, 2005):

Centralized and un-diversified, because they generally try to deploy a single

solution for complex waste-generating urban environments.

40

Bureaucratic, since such solutions are usually enforced top-down, without public
consultation.

Capital-intensive approaches, because they involve advanced imported technology,

which does not reflect the existing conditions in the target region21; such as waste
compactor trucks, or final disposal via incineration.

Formal, a particularly social-impacting trait, by which conventional solutions only

consider the formal sector, while ignoring the potential contributions of the waste
informal sector (kerbside pickers, scavengers, etc).

In addition, conventional solutions consider waste management as a disposal

problem rather than as a materials flow management one. Those solutions aim to
maximize collection rates and upgrade facilities for final disposal, and thus ignoring
the waste management hierarchy, which emphasises 3R approaches.

Adequate, sustainable waste management involves several approaches. For instance, in

Europe, and due to policy measures such as landfill restriction directives, it is applied the
waste hierarchy (see Figure 4-1) and thus reducing, reusing and recycling (3Rs) practiced
before resource recovery, incineration for energy recovery and landfilling. In Japan,
recycling of certain fractions is mandatory and the remaining fractions are incinerated
towards volume reduction (usually without considerable energy recovery). In many
developing countries, waste management involves only joint collection, street sweeping
and dumping the waste (either in a proper sanitary landfill, but very frequently in an
uncontrolled dumpsite). Nevertheless, such a situation is changing, and developing
countries are creating strategies and policy instruments to proper manage waste. The main
obstacles are usually declared to be of economic nature, but they include political and
social-idiosyncratic factors.
Some successful initiatives, depicting the state of the art of waste management as feasible
for developing countries, are setting a benchmark for those societies that cannot afford
investment-intensive approaches; for instance22:

Neighbourhood collection systems (based on source separation, sometimes NGOorganised, sometimes including either decentralised composting or vermicomposting). A variation of this could involve collection of organic fractions only,

21
22

Nevertheless, high technology-based solutions are sometimes economically feasible.

Partially based on (UNEP, 2003).

41

from households and restaurants, to feed pigs (ideally after some stabilisation
process, i.e. thermal, to prevent spread of diseases).
o

Practiced by the Clean-Green Project in Metro Manila and several

organisations in Bangalore and other Indian cities.

Corporate sector support to separation at source initiatives, for instance, as CSR

initiatives.

Neighbourhood or district low-tech labour intense sorting plants, requiring a

collection system in place. It could even be escalated to the municipal level, by
means of municipal manual sorting plants.

Private or Municipal composting facilities related to dumpsites23.

o

Like the Cau Dien plant in Hanoi, the Karnataka Compost Development
Corporation in Bangalore and the vermi-composting private company Terra
Firma Biotechnics also in Bangalore.

Assistance to waste dealers, scavengers, kerbside pickers and recycling industries to

engage in associations, collaboration and more effective collection.

School separation and other programs for public education, which can generate
revenues for the school and spread awareness. This could include collection of
household waste oils for biodiesel production.

Municipal-driven separation at the source, which has proved difficult especially

among the most economically depressed population, but if combined with
incentives can work out.
o

Initiatives in Curitiba and Goinia, Brazil.

Several best practice initiatives of combined approaches in developing countries can be

used as starting point (after careful historical performance analysis) for new initiatives, for
instance:

The Chilean Marga-Marga region, composed by several municipalities, is currently

developing an integrated waste management solution which involves mechanical
and biological treatment of MSW, a waste-to-energy solution for organic fractions
via anaerobic digestion and biogas production, a post-composting process to yield

23

Composting should be considered with extreme care, because depending on the scale and
other factors can turn out harmful (due to emissions), expensive (due to energy and
infrastructure requirements) or simply not suitable to process large amounts of MSW.

42

soil ameliorant, integration of marginalised scavengers and kerbside pickers into

the scheme as to deal with some separation stages and recycling, etc. The whole
scheme will be feasible by itself, and as of May 2009 a treatment cost of 14
euro/ton is being discussed. Innovative financing of the project involves contracting
and targeting European development aid funding, among other fundraising
approaches24.

Los Baos, Laguna, in Philippines, combines several of these approaches: from 2004
the local dumpsite was turn into an ecological waste processing center featuring
segregation at source, unloading of bio-wastes, final sorting of bio-waste,
composting, and shredding of residual wastes, specifically plastics. Besides,
informal waste collectors and kerbside pickers where officialised into a peoples
organization and their significance to the community has been recognized and the
local government conducted massive information, education, and communication
campaigns (Atienza, 2008). In practice, this system still fails to process the whole
MSW generation of its target region, but at least represents a starting point for
better waste management in the region.

Another integrated initiative featuring several approaches is the Belo Horizonte

waste management strategy and practice since 1993. The technological component
features differentiated collection systems, three materials recovery plants, two
construction debris recycling plants, a composting plant, and the conversion of the
BR-040 landfill to an anaerobic bioreactor landfill which will extend its life from 2 to
18 years. The other components of this approach are continuous modernisation
(capacity building) of the system and continuous promotion of citizen participation
(WB, 1997). Also a multidisciplinary team was formed by the municipality to engage
in mobilisation work with many social groups and waste pickers were successfully
integrated within the collection of recyclables (and their quality of life enhanced in
several ways, including education), in combination with a drop-off system (Dias,
2000).

24

From discussions with IfaS project managers involved in the Marga-Marga project, January-May
2009.

43

Section II:
Energy and Waste
management in Ecuador:
diagnosis and outlook

44

5. Introduction to Ecuador
Ecuador is a small South American country (approximately 2/3 of Germany) sharing borders
with Colombia and Peru, and encompassing (after a history of border conflicts with Peru) a
land area of 256 370 km2 (IR1). The country possesses four differentiated natural regions,
namely Coast, Andean Region (highlands), Amazonian Region, and Galapagos Islands. This
geographical variety provides diverse climates: dry, cold, temperate, tropical and tropicalhumid. Ecuador also features 2 237 km of coast line, and two main country-wide seasons:
rainy and dry.
Population was estimated as of July 2008 in more than 13 900 000 inhabitants. GDP per
capita was US$ 7 200 in 2007, and more than 58 % of GDP is derived from the services
industry (IR1). More than 60 % of population lives in urban areas, and more than 45 % of
the total population lives under the poverty line (according to United Nations standards).
Ecuador is an exporter of raw materials, mainly oil, bananas, cut flowers, cacao and shrimps.
The countrys dependence on oil exports is dramatic: i.e. oil exports accounted for 60 % of
foreign revenues in 2006 (Pelez, 2007). Nevertheless, as the country lacks refining capacity,
is a net importer of refined oil products, namely gasoline, diesel and liquefied petroleum
gas.
After the economic depression and collapse of the banking system in 1999, Ecuador
adopted the US Dollar as its national currency, somehow stabilising inflation but depriving
the country from the possibility of having its own monetary policy. The country depends
heavily on annual exports to finance its budget, and has profited from the oil prices in the
last years. The current government is intensely investing in infrastructure by using the
special government accounts that historically accumulated oil revenues.
Ecuador relies largely on hydroelectric generation for the national electricity supply and on
oil for other primary energy. Due to seasonal effects on the water reservoirs, hydropower is
complemented by conventional thermal generation and even electricity imports from
neighbouring Colombia (Pelez, 2007).
Regarding waste management, the best practice approach is sanitary landfills, but most of
the municipalities (waste management responsibility is municipal) feature only open or

45

controlled dumpsites (WHO, 2002). There is a National Water and Sanitation Policy, related
also to MSW-derived water contamination, but unsuccessfully designed and implemented.
The following chapters will describe thoroughly both the energy and waste situations in
Ecuador.

46

6. Current energy situation

In 2004 the country produced 10,73 MTOE of primary energy25, where more than 82 % was
from oil and only 14 % from renewable sources, mainly hydropower which constitutes the
second largest source of energy (Pelez, 2007). Regarding electricity generation, 45 %
(Pelez, 2007) to 46,6 % (CONELEC, 2008) of it is until today produced by hydropower,
while the difference is based mostly on oil-driven conventional thermal generation
(RECIPES 2006). Figure 6-1 depicts the effective electric capacity, by type of generation.
Effective capacity

Wind

Figure 6-1: Effective capacity by type of generation, July 2008

Source: (CONELEC, 2008)

The countrys large hydropower generation potential is largely exploited and further
developed. The main problem is the sensibility of hydropower sites to the dry season
(October to March). It is common the occurrence of blackouts and energy restrictions
during the drought season. In those months, the country relies heavily on thermal
generation and (expensive) energy purchases from Colombia (RECIPES 2006). Overall, the
country produces more primary energy than it consumes (in a 3:1 ratio), and also more
electricity than it uses: 12,9 TWh net generation and 8,9 TWh net consumption in 200526,

25

26

Primary energy is understood as the energy contained in renewable and non-renewable energy
carriers, i.e. fuels.
Data from the first semester of 2008 shows growth in installed capacity, generation and
demand. See Appendixes: 12.1 Status of renewable energy technologies: characteristics and
costs.

47

with an installed capacity of 3,3 GW (IR4). This electricity overproduction is seasonal,

restricted to the rainy season.
Hydroelectric generation is dominated to a large extent by Hidropaute, a (partially) stateowned corporation which owns and operates most major facilities. For instance, the 1 100
MW Paute plant, located in eastern Ecuador, represents about 60 % of the countrys
existing 2 030,68 MW hydroelectric generating capacity (CONELEC, 2008). Other key
hydroelectric projects in Ecuador include:

The 180 MW Mazar plant acts as a secondary holding reservoir for Paute (allegedly
reducing sediment build-up and increasing production capacity during the dry
season).

The San Francisco project, downstream from the existing Agoyan plant on the
Pastaza River. The San Francisco project is a run-of-river style plant, diverting water
through an underground channel. The dam was completed in 2008 by the Brazilian
civil engineering giant Odebrecht, but serious problems with its turbines and
conduction tunnels had the 350 MW project shut down. There is an ongoing legal
conflict between Odebrecht and the Ecuadorian government, which threatened to
expel the company from Ecuador and seize its assets (IR2).

The 130 MW Daule-Peripa project.

Thermal generation is mostly diesel-fired; contributing largely to the countrys imports of

diesel, given its insufficient refining capacity, of up to 30 % of total oil production (WEC,
2007). Thermal power generation plants are supplied with fuels by the state owned oil
company Petroecuador, through financing mechanisms that do not enforce payment of
debts. This supply below market prices has resulted into several undesirable outputs: the
power generation sector lacks capital, and thus cannot address dropping efficiency due to
sub-maintained equipment; and a rising electricity demand (to be addressed by imports). In
2005, 4,8 million barrels of fuel oil, 2,86 million barrels of diesel and around 643 000 barrels
of nafta where used for electricity generation. Large amounts of these fuels are imported
and supplied to the electricity generation sector under the abovementioned subsidies.
Ecuador pays the international market price for these refined fuels but provide them to the
generation companies for a lower price (in case of diesel for example for only 50 % of the
price paid), since they cannot meet the debt payments (Huiskamp, 2007).

48

Figure 6-2 depicts the Ecuadorian energy grid, featuring main hydropower and thermal
facilities.

Figure 6-2: Ecuadorian Energy Grid in 2007

Source: (CONELEC, 2008)

CONELEC, the Ecuadorian National Council for Electricity, publishes detailed production,
consumption and projected electricity generation data, with emphasis on hydroelectric and
thermal generation. CONELEC made available a highly detailed technical survey on solar
potential in Ecuador, but nevertheless, there is no widespread solar application
(photovoltaic or solar thermal) in Ecuador (IR6).
Natural gas is not widely used mainly due to lack of infrastructure (IR11). Wood-fired
generation is not widely practiced (up to 4 % of the total generation) mostly due to the
large rate of electric coverage, close to 90 % overall in 2001 (93 % urban, 79 % rural), and

49

improving (Pelez, 2007). Coal and nuclear powered generation are neither practiced nor
planned.
Current renewable-based generation is limited mostly to small-scale generation projects,
based on wood, waste, wind and bagasse. The most representative renewable initiative is
the Las Chinchas wind energy project, where a 10 MW wind energy project was
completed to prevent almost 20 000 tons of CO2e per year, 17 000 of them redeemable as
carbon credits (IR5). Other renewable projects running and planned are aimed to
electrification of isolated areas, mostly by means of photovoltaics, hybrid diesel/PV,
creation of minigrids, and the like (IR13). One representative and recurring theme is the
electrification of Galapagos Islands. There are small PV and wind projects running in the
islands to reduce the diesel dependence for power (Pelez, 2007) (IR16).
In Ecuador there are no state-driven incentives for biofuels (i.e. like in Brazil) and just
recently other renewable energies are acknowledged as desirable in the national energy
mix, and thus slowly being supported (i.e. small hydro, PV, etc).
One important energy-intensive sector has been historically neglected in Ecuador: public
transportation. It does not exist in the country any mass transportation system, except for
Quito (the electric bus-tram system Trolebus) and Guayaquil (the diesel bus-tram system
Metrova, still under development). Both systems fail to satisfy the transportation needs of
those two cities, and are complemented with thousands of highly polluting undermaintained buses. Besides, national and regional transportation relies mostly on
conventional buses and trucks (there is no train system in the country). Taxi drivers often
modify their vehicles to run on gas, and illegally use subsidised domestic gas cylinders, since
there is no legal LPG or LNG supply mechanism for vehicles.
The state subsidises virtually all fuels, including gasoline 27 , diesel, domestic gas and
electricity. Such indirect subsidies, among other causes, have lead to electricity prices
below the actual costs of production, transmission and distribution. Given that situation,
electricity demand in Ecuador is rising at around 5.9 % per year (CONELEC, 2008), with a
tendency to increase even faster, i.e. 7 % per year (Huiskamp, 2007).

27

Gasoline subsidies benefit mostly to the car-owning rich people, recipients of 85 % of that
subsidy, as opposite to 1 % perceived by public transportation (Pelez, 2007).

50

The national electric demand is depicted in Figure 6-3. Domestic consumption accounts for
the larger share of the demand, equivalent to commercial and industrial demand combined.

Figure 6-3: National electric demand, first semester of 2008

Source: (CONELEC, 2008)

6.1. Current energy policy

Ecuador has been carrying out a reform of the electric sector since the mid 1990s, when the
Law of the Electricity Sector was created, leading to ensure more competitive electricity
supply and, by means of encouraging private investment, end the state electricity
monopoly. This law granted the state regulation and control responsibilities, while
generation, transmission, and distribution where to a large extent left to private companies.
Many state-owned generation companies where given in concession or sold to the private
sector, but nevertheless, until today, the transmission infrastructure is owned by the state.
Since the Electricity Law failed to fulfil the expectations, due to socio-political barriers, a
Fund for the Electricity and Hydrocarbon Sectors (FEISEH) was approved by the National
Congress on September 2006, with the hope of facilitating the financing of high-priority
hydropower projects. Besides, in articles 413 and 414 of the new constitution (2008), the
Ecuadorian State commits to the promotion of energy efficiency, renewable energies and
measures aimed to reduce the Greenhouse Effect; among other pro-sustainability aspects.
The articulation of those articles into policies and legislation is to be carried out.

51

A public social-oriented corporation known as the Solidarity Fund is the main shareholder
of all main generation and distribution operations, accounting for 51 % of ownership. The
Fund has decision power and is perceived in relation to the electricity sector as an
additional layer of bureaucracy. The state owns the national transmission grid through the
Fund.
In general terms, the national distribution grid is inefficient, making energy costs higher due
to transmission requirements. Therefore, Ecuador has since long time ago subsidised fuels
and electricity for internal consumers (IR8), for instance, via the Dignity Tariff, a preferential
tariff of 0,04 US$/kWh for household consumers of less than 110 or 130 kWh per month (in
the regions Highlands and Coast, respectively)28.
Electricity prices are set, as mentioned, non-technically and under market prices by a
complex institutional apparatus. Foreign and domestic private investments in the electricity
market are not likely to increase when the price of electricity is artificially low (Huiskamp,
2007). Nevertheless, to redefine the tariff structure in a technical fashion is in the
governmental electricity plans at least for the last 10 years. The last reforms yielded some
incentives for private non-conventional energy generation projects (i.e., privately produced
renewable energy is granted a special price for 12 years).
Another influencing trait of Ecuadorian energy market is the high index of electricity
stealing and the difficulty of collecting consumption bills from final consumers, especially in
the large slumps surrounding the main two cities (Guayaquil and Quito, home of roughly
1/3 of the countrys population).
The combination of issues faced by the Ecuadorian electric sector has lead to the
(expensive) importing of 9 % of the consumed electricity, and a loss of nearly 22% of all
generated electricity (Huiskamp, 2007). Energy losses originated in distribution systems
reached 1 484,99 GWh as of July 2008, representing 19,83 % of the generated electricity
(CONELEC, 2008).
Under the current situation, and as of July 2008 (CONELEC, 2008):
28

This subsidy-based tariff is applied since July 2007 until today. The state absorbs the difference
and had spent in the order of US$ 3,8 million per month, and increasing. The effects of this
measure include many users lowering down their consumption levels to profit on the Dignity
Tariff (IR28). No punishing tariff for over-consumers has been launched so far, and it is not clear if
the new unique (homogenized) tariff will overrun the Dignity Tariff.

52

There are 18 generation agents, 20 for distribution (all owned by the Solidarity
Fund), 23 self-generators, 1 for transmission and some 121 large consumers. The
average price paid for nationally-produced electricity was 0,0486 US$/kWh (price
paid to generators), while the price paid for electricity acquired from Colombia was
0,071 US$/kWh.

It is allowed for generating agents to sell electricity to distribution agents and large
consumers (through Power Purchase Agreements).

So-called self-generation agents are allowed to sell electricity to their shareholders,

even if they are not large consumers.

CONELEC is the regulating, standardizing, and controlling body, while CENACE

manages the technical and commercial transactions of the Wholesale Electricity
Market (created by the Law of the Electricity Sector), and coordinates the
integrated operation of the Interconnected National Transmission System.

Figure 6-4 depicts the current structure of the Wholesale Electricity Market in Ecuador.

Figure 6-4: Structure of the power market in Ecuador

Source: (IR9)

CONELEC, via the Solidarity Fund, manages the FERUM, Fund for Rural and Marginal-Urban
Electrification (created by the Law of the Electricity Sector), whose purpose is to finance
grid extensions and other rural electrification projects, like photovoltaic solutions for
remote rural areas. Through the FERUM, over 1500 PV systems have been installed in rural
areas (IR17). In September 2008, CONELEC presented a Rural Electrification Plan, with a 5-

53

year period of application (IR19). Existing solar applications in Ecuador are of small/micro
scale, thermal (for water heating, pumping, agricultural products drying, etc) and PV (rural
electrification, remote military facilities, oil companies and in general for remote griddisconnected areas) (IADB, 2006).
CONELEC is responsible for preparing and publishing the National Electrification Plan (19982007 and 2006-2015 published), describing the governments strategy for the sector within
a 10-year period. The 2006-2015 Plan does not mention any strategic insight on renewable
energies other than the further development of the countrys hydropower (CONELEC, 2006).
The current legislation includes the following incentives for generators (IR9):

Non-conventional energy is granted a special price for 12 years. CENACE will

purchase, preferentially and mandatorily, all energy produced from renewable
sources up to the limits set by Art. 21 of the Wholesale Electricity Market operating
rule (2 % of the conventional installed capacity, or approximately 72 MW). Figure
6-5 depicts the listed prices, which also apply for non-grid connected generators
(IADB, 2006).
Price in US$/100/kWh
Generation

Continent

Galapagos

Windpower

9,31

12,10

Photovoltaic

28,37

31,20

Biomass and biogas

9,04

9,94

Geothermal

9,17

10,08

Hydropower (< 5 MW)

5,80

6,38

Hydropower (< 10 MW)

5,00

5,50

Figure 6-5: Prices for renewable energies in Ecuador

Source: (IADB, 2006)

Depending on location, new energy generators can receive waivers of the income
tax (25 %) and certain municipal taxes; also waivers for importing of machinery and
equipments. Also sales tax (12 %) during construction is to be reimbursed.

Payment of bills is guaranteed for generation agents, from trust funds established
by distributors. Besides the bill collection risk can be minimised by selling to the
private sector only.

54

The Ministry of Energy and Mines established several policies for the electricity sector in
2006, among the most important ones (Pelez, 2007):

To incentivise private investment in the electricity sector, complementing private

investment with state investment if needed.

To promote PPP for new generation projects, especially hydroelectric.

Assume the tariff deficit into the National Budget, guarantee the payment to
generators, re-group distribution companies towards economies of scale, and other
subsidy-based approaches to make the energy market more attractive for investors.
o

Under such approach, the Mandate 15 of the Constitutional Assembly (the

team who wrote the 2008 Constitution) established in July 2008 the
introduction of a nation-wide homogenised electric tariff for final
consumers, yielding a national average of 0.0831 US$/kWh (IR27).

Also the state will assume the huge debt state distribution companies have
with the generating companies, debt that reached almost US$ 1000 million
in 2007 (IR29).

To eliminate political interferences with electricity utilities. This is positive since

mafias/syndicates and political manipulations surrounding the electricity sector are
a main problem in Ecuador (IR10). Also limit the role of the Solidarity Fund to social
programs.

To promote the sustainable use of national energy resources, including renewables.

The current government (since January 2007) has created a new ministry, the Ministry of
Electricity and Renewable Energy 29 , featuring the declared objective of shifting the
electricity generation situation from 43-45 % of hydropower to up to 80 %, complemented
by further 10 % of other renewable energy sources (IR7). Such long term objective faces
certain barriers, which are partially overrun by the recent renewables friendly energy
legislation (IADB, 2006):

Ecuador is considered as financially uncertain and risky country for investment,

both by national and foreigner investors. Therefore, investors prefer shorter
capital-recovery periods and thus favour thermoelectric projects before
hydroelectric or other renewables, because thermoelectric projects are perceived
to feature lower capital intensity.

29

The former Ministry of Energy and Mines is currently dealing with mining only.

55

Historically, and construction of big hydroelectric projects, Ecuadorian governments

have privileged faster implementation energy projects, namely, thermoelectric.

Debt of distributing companies has accumulated in the last years.

National banking system and international banks generally limit financing of

generation projects in Ecuador. For instance, hydroelectric projects involve high
capital costs and long return periods, and require credit during 7 to 9 years; but the
local banking institutions sets a maximum period of 5 years for credit granting.

Biomass, wind and solar projects face additional barriers, because those
technologies are not widespread in the country and thus are considered as riskier.

Nevertheless, there are several key problems of Ecuadorian policy-making that hinder all
modernisation and rationalisation efforts, and hinder sustainable development:

The generalised short-termed planning approach of the government, since each

new elected government replaces most of the decision makers in all the economic
sectors.

The untouchability of certain sectors, such as the energy subsidies. This situation
is due mostly to popular pressure (civil unrest can even overthrow presidents in
Ecuador, as seen several times in the recent history).

The existence of powerful syndicates/Mafioso groups 30 inside state-owned

companies (oil, electricity, social security, etc).

Political or populist-driven policies are often imposed, rather than technical-driven

ones.

30

Those groups are often referred to as la burocracia dorada (golden bureaucracy) by the
national media and the public in general.

56

7. Potential for renewable and other sources

Ecuador features great potentials for different renewable sources of energy31, even though
historical and current electrification and energy plans usually focus almost exclusively on
hydropower. Biofuels and other biomass-to-energy applications have not been explored
beyond pilot project initiatives. Also, there is the need to exploit an important nonrenewable source already usable: associated gas from oil extraction.

7.1. Biomass, excluding municipal solid waste

Ecuador, due to its rich natural environment and social structure, features immense
potential for biomass-derived fuels32.
A National Program for Biofuels was established through Executive Decree 2332, declaring
the production, commercialization and use of biofuels to be in the national interest. No
further evolution of such program has been published. Even though legislation exists since
2004, just recently the government is re-taking interest in biodiesel; so far the biofuels and
ethanol programs exist only in paper (IADB, 2007).
At least 5 million hectares are classified as degraded land in Ecuador. Biomass growing for
energy (bioethanol, biogas) could be easily grown in such areas, and in fact is being
considered by the government. For instance, 75 000-76 000 hectares of sugarcane are
currently grown for sugar production, and according to the government, could be easily
augmented by 50 000 ha (by developing degraded land) for ethanol production (IR12).
Current ethanol production is approximately 60 000 litres per day (IADB, 2007).
Co-generation based on sugarcane bagasse is also growing, for instance, 318 000 TOE of
bagasse were used to produce electricity in 2004 (Pelez, 2007), and estimated potential in
2005 was 1 532 thousand tons (WEC, 2007). In Ecuador there are currently three biomass
projects under development or operating: the San Carlos Sugar Company (28 MW), the
Valdez Sugar Company (15 MW, featuring also grid connection) and the IANCEM project
(1,4 MW). All of them use the waste of sugar production processes, since sugarcane yields,
after extraction of sugar juice, nearly 80 tons/ha of biomass (Huiskamp, 2007).
31

32

Tidal and wave power would not be taken into account, since there is no data available for the
country. The only tidal project in South America is located in the Magellan Strait, in Chile (IR26).
See Appendixes: 12.5 Biomass to fuels conversion routes for a relation of various biomass to
fuels conversion routes.

57

Another source of feedstock for biodiesel could be palm oil. Approximately 207 000
hectares are dedicated to palm, yielding 350 000 metric tons of palm oil, 57 % of which is
consumed domestically and the rest is available for export. The government also considers
diverting the exportable percentage for domestic biodiesel production (IADB, 2007).
Ecuador is the sixth largest producer of palm oil, which was its 11th Ecuadorian export
product in 2005 (Huiskamp, 2007).
Ecuador has various enforcing reasons to produce energy crops (Huiskamp, 2007):

The global export market is projected to grow strong.

Ideal circumstances and experience for the growing of these crops (palm oil, sugar
cane) in the coastal area.

Availability of affordable labour.

Even if biofuels are not exported but domestically used in Ecuador, the large and
costly imports of refined oil products can be lowered, local air quality could
improve considerably due to improved combustion efficiency which is
particularly necessary in Quito (IR60), the growing of energy crops can provide
the agricultural industry with a new source of income and create additional
employment. The net energy balance of such initiatives would have to be assessed,
but based on climate conditions, at least high yields can be expected.

7.2. MSW and other waste streams

Main cities like Guayaquil, Quito and Cuenca are running gas flaring projects related to their
landfills, but no waste management systems are in place, as to make biogas production
suitable. Each and every municipality in Ecuador is entitled to deal with the districts waste
management, but virtually only the three main cities feature controlled landfills.
Waste is a great problem in Ecuador. In 2002, with a waste generation of approximately 7
500 tons/day, less than 50 % of the population enjoyed some kind of waste collection and
disposal system (WHO, 2002).
Some of the key aspects driving and driven by the current state of affairs regarding waste
management in Ecuador include the following (WHO, 2002):

Municipalities: poor management capacities, lack of understanding of the legal and

operative framework, corruption and populism.

58

Central government: lack of inter-institutional cooperation, diffuse and incomplete

legal framework, lack of technical frameworks and norms, tolerance of illegal
dumpsites, inexistence of infrastructure to treat/dispose toxic, especial and
dangerous waste materials.

Others: lack of generalised recycling schemas, scavengers in dumpsites and

kerbside pickers33, waste collection fees decided in non-technical ways, lack of
awareness within the population, etc.

A fundamental element for the countrys development should be the top-down approach
from the central government of banning the extended practice of open dumping and
applying restrictions to sanitary landfills. A comprehensive national plan for waste
management should be developed, providing legal, technical and economic assistance to
municipalities to rationalise the waste management. A proper waste management strategy
would include: separation at the source (previous educative campaigns), recycling schemes,
inclusion of scavengers, integration of the organic fraction 60 to 70 % in Ecuador (IR14)
into the energy strategy, support for private initiatives and, especially, banning of
dumpsites.
Other aspects of waste management (or revalorisation of by-products) could easily include
the issue of agricultural wastes. Nowadays, materials such as straw, vegetable peels and
rice husks are simply burned down in the open or dumped in the nature. Such materials
should also be integrated into the energy strategy (for biogas, co-firing, etc) by means of a
combination of legislation and technical-economical alternatives.
For instance, in the coastal province of Guayas, more than 57 000 hectares of rice yield over
37 000 tons of rice husk per year34. A 3 MW power plant would require 31 000 tons of rice
husks per year, if operating at a 90 % capacity factor. This would result in 5 580 tons of ash
per year. Revenue from selling the ash for beneficial use would decrease the pay-back
period for the capital needed to build the project (Bronzeoak, 2003).

33

34

An interesting aspect is the existence of some recycling operations in big cities, mostly by the
private sector, relying on city scavengers and kerbside pickers who collect cardboard, PET and
glass from domestic waste before it is collected by the municipality.
Data from the field research: Association of municipalities of Guayas province, Ecuador, 20062007. Institute of Enterprise Sciences, http://www.ucsg.edu.ec/ice/.

59

7.3. Photovoltaic and solar thermal

Ecuador lies in a very conveniently sun-irradiated zone of the world. The CONELEC has
made available a Solar Atlas of Ecuador for energy generation purposes, featuring detailed
solar maps of the country (including direct, diffuse and global irradiation) on a month basis.
According to that document, as depicted in Figure 7-1, insolation values on the Ecuadorian
territory range between 3,6 and 5,7 kWh/m2/day, being the annual media of 4,6
kWh/m2/day, much superior to Central Europes average values (CIE, 2008). The two most
insolated regions are Galpagos and the Andean highlands (IADB, 2006).

Figure 7-1: Solar insolation in Ecuador (annual averages)

Source: (CIE, 2008)

In Ecuador, the main limiting factor for photovoltaic applications seems to be the cost,
since solar panels and the electricity generated with these remain one of the most
expensive alternative energy sources, both in a per unit of energy basis and regarding initial
investment (Huiskamp, 2007). Nevertheless, it is a suitable alternative for off-grid areas,
especially in rural or remote locations.

60

7.4. Hydroelectric
Ecuador possesses more than 2 000 rivers and streams, translated into more available
freshwater resources per capita than almost any other country. The existing hydroelectric
projects (with a combined installed capacity of 1 750 MW in 2006) do not generate the
expected output along the year, due to seasonal variations in water flows. It does not seem
to exist a comprehensive dam and water diversion strategy for the country, but,
nevertheless, at least 226 new hydroelectric projects are planned (IR18).
The highlands region features frequent rainfall, thus creating the ideal circumstances for
micro-hydroelectric plants (Huiskamp, 2007). The countrys hydroelectric potential is
estimated in 11,7 GW (Pelez, 2007), and the government has a strong interest in further
develop the current capacity towards 80 % of the power generation based on hydropower
(IR7). The CONELEC portfolio of hydropower projects in different levels of realisation (study,
inventory, financing, feasibility) reaches over 11 818 MW of new installable capacity;
corresponding 9 171 MW to 23 projects over 100 MW (IR6).

7.5. Wind
Wind potential in Ecuador is considerable, yet circumscribed to certain locations. The most
interesting areas the highlands (2,4 to 8,0 m/s) and the coastal region featuring maritime
breezes (> 3,5 m/s) (IADB, 2006).
The Las Chinchas project and the 15 MW Villonaco project for the Andean city of Loja
(IR15) are among the most representative wind projects. Other pioneer projects are
Huascachaca (Azuay) 30 MW and Salinas (Imbabura) 15 MW (IADB, 2006).
Wind power is also an alternative for the Galapagos Islands, which despite several energy
projects in the past, still rely on diesel for power generation. In 2007, the Ecuadorian
government retook attention on the islands energy situation, and heavily promoted
(supported by many countries and institutions) a 2,4 MW windpower project to halve the
diesel consumption in the main inhabited island. The San Cristbal wind project yielded in
its first year of operation 2,5 MWh. In this site, wind speed ranged between 3,5 and 11,9
m/s in 2008, an unusually low wind speed year for the islands standards (IR16).

61

7.6. Geothermal
Ecuadors geothermal potentials are large (RECIPES 2006), given its location in the Pacific
Fire Ring. The geothermal potential was estimated in 2000 as of 534 MW (Pelez, 2007).
Several sites along the Ecuador-Colombia border and several other high and low-medium
temperature geothermal prospects have associated project proposals, but await
investment to be developed. Figure 7-2 depicts current geothermal projects and potentials.

Figure 7-2: Geothermal sites and potentials in Ecuador

Source: CONELEC (http://www.conelec.gov.ec/)

62

Geothermal utilization in Ecuador is restricted to bathing resorts, mud baths and swimming
pools (like in the Andean city of Baos). A total of 22 locations were reported in 2005, for
an installed capacity of 5,2 MW and 102,4 TJth/year annual use (WEC, 2007). Exploration
and reconnaissance studies have been carried out from the mid 1970s through the early
1990s; however research in the topic has been discontinued (Lund, 2005).

7.7. Oil industry gas flaring reduction

As of January 2006 Ecuador had natural gas reserves in the order of 345 billion cubic feet
(BCF)35. As mentioned, there is barely any infrastructure for natural gas in the country. The
only large-scale natural gas project in Ecuador is the Amistad field, in the Gulf of Guayaquil
(IR11). Production capacity of this field is 8 BCF per year, and all production flows to the
Noble Energy-owned Machala facility, a 130 MW onshore gas-fired power plant (IR23). This
thermogas power plant supplies electricity to the Guayaquil region.
The Ecuadorian oil industry flares a significant amount of natural gas from its operations, as
there are no capturing systems installed (IR 11). The volume of gas flared per year reaches
35 BCF, or the equivalent to 6,3 million barrels of oil (2,905 million TOE). In parallel,
Ecuador imports nearly 8 million barrels of liquefied natural gas a year (equivalent to 6
million barrels of oil, almost the same volume of natural gas flared), for higher prices than it
is sold domestically, due to the state policy of subsidising domestic gas36. Such a situation is
expected to change due to economic, political, environmental and international pressures
(Huiskamp, 2007).
According to the Ecuadorian petroleum laws (Hydrocarbons Law), the state owns the gas
produced by the oil industry, and therefore there are no incentives for private oil
companies to reduce or eliminate the practice of flaring by commercialising the gas. The
same law could allow the state to directly ban gas flaring.

35

36

Estimations for 2007 suggest reserves over 1 000 BCF (Huiskamp, 2007) equivalent to 830 million
TOE.
In 2001, the state collected US$ 107 per ton of domestic gas, while the import cost was US$ 315
per ton. Ecuador features the lowest price for domestic gas in the continent US$ 1,60 per 15 kg
bottle (IR8), leading to non-authorised widespread use of the subsidised gas (for mobility and
commercial purposes), and even to gas smuggling to Colombia and Peru (Huiskamp, 2007) (IR24).
Every time the government attempts to modify or eliminate the gas subsidy, nation-wide riots
and other social unrest take place.

63

Besides, due to the domestic gas subsidy, there is also no incentive for Petroproduccin
(Petroecuadors production branch) to recover the natural gas. For instance, in 2001 the
total amount of associated gas (by-product of the oil production) produced was 35 BCF,
64 % of it by Petroproduccin, which flared nearly 40 % (14 BCF of that gas). Tecpecuador
(a Petroproduccin company) flared another 4,9 BCF. Ecuadorian natural gas could be
otherwise used for (Huiskamp, 2007):

Producing Liquefied Petroleum Gas (LPG), which Ecuador currently imports.

Producing electricity, especially for the Rural Electrification Program, since the
transportation of electricity is cheaper than infrastructure for LPG, and natural gas
is commonly produced in remote rural or natural areas.

Developing carbon credits-oriented mechanisms, by incurring in emissions

reductions.

Usually investment is the main constraint for infrastructure in Ecuador, but undoubtedly
several international institutions and companies would be willing to invest in a natural gas
initiative, like they have done in Ecuadorian hydropower and windpower projects.
Another main constraint is technology, for instance, to overcome transportation distances
(either for generation or refining into LPG). Quality and availability of gas can also be a
constraint, since, for example, high contents of CO2 can be harmful for generation
equipment (IADB, 2006).

64

8. The need for a National Energy Strategy in Ecuador

In general terms, several factors seem to hinder a countrys transition towards sustainable
energy management. Among those barriers this report suggests:

Lack of a national or regional development or energy strategy, including all

institutions and legal/technical framework required to institutionalise sustainability
and encourage private and state investment. Lack of interrelation among energy
and energy carriers policies.

Lack of political interest in sustainable energy management, governmental

corruption and economic constraints, making both governmental and private
investment risky or unproductive.

The existence of lobbying groups representing the interests of oil and automobile
companies, the so-called Energy Lobby (IR22).

Cheaper alternative: Until now, sustainable energy generation can t compete with
fossil fuel generated energy, thus, until they do the application of these will remain
largely dependent on government support (Huiskamp, 2007).

In Ecuador, the current situation regarding such factors is as follows:

The country lacks a comprehensive National Energy Strategy, and energy-related

decisions (especially those regarding electricity) are made often in a non-technical
way and dissociated from other key aspects (subsidy policies, ongoing dependency
on refined oil products, etc).

There is rising political interest in optimising of the energy sector, combined with a
corrupted and gigantic state despite governmental efforts against corruption, and
limiting economic factors (partially addressed by the new energy law and other
measures).

Lobby groups apparently only target the relations between oil companies and the
government, regarding contracts and corporate social responsibility issues.

Several financial support mechanisms are applicable in Ecuador, for instance, the
Kyoto Protocol-derived Clean Development Mechanism. Despite Ecuador being a
small country, its CDM portfolio37 has grew from 2006 (when only 3 projects were
registered) to June 2008 (when 19 projects were either registered or in validation).

37

The website of the national CDM promotion office, CORDELIM, features the Ecuadorian CDM
portfolio: http://www.cordelim.net/cordelim.php?c=446.

65

This figures corresponds to nearly 0,5 % of all projects in the world portfolio, or
0,2 % of all CERs expected to be issued until 2012 (IR21).
A fundamental socio-political and economic issue of Ecuador is the large state body of
subsidies for energy and energy carriers, which represented to the state a cost of around
US$ 2,1 billion in 2007 (IR8) (Pelez, 2007). Rationalisation of the countrys subsidy program
is a critic step towards an energy transformation.
Despite the current governments interest in energy efficiency and development of
renewable energies exemplified by the 6 million light bulb substitution program launched
in 2008 (IR20), official statements about the Biofuels Program and the new Ministry of
Renewable Energy, no coherent National Energy Strategy has been formulated.
In order to cope with the energy needs of the country towards sustainability:

All electrification plans should be integrated into a National Electrification Strategy,

namely, the National Electrification Plan, Rural Electrification Plan, and the Ministry
of Renewable Energys Energetic Matrix.

All energy-related plans (namely the National Electrification Strategy and all oil,
fuels for mobility and domestic gas plans) should be integrated into a National
Energy Strategy.

Such a National Energy Strategy should thus address all energy-related issues of the
country, and yield all kinds of policy measures to enable the transition to a
sustainable energy environment in the country.

Policy measures should be the cornerstone of the National Energy Strategy. Such body of
policies38 should encompass and balance economic, regulatory, informational, educational,
research and cooperation policies, both rewarding and penalising (CSCP, 2006).
As an example of the potentials of a coherent policy body, the following government
policies have given Germany a leading role in the field of sustainable energy sources and
energy efficiency technology: industrial energy efficiency obligations, feed-in acts,
regulations for buildings and home appliances, policies on car energy efficiency, sectorspecific mandatory energy audits, a series of economic and fiscal incentives, and severe
punishments for transgression or non-compliance (WEC, 2008).
38

See Appendixes: 12.4 Nature of policy instruments for an overview of suitable policy
instruments.

66

Via policy-making, an enabling environment for sustainable development can be built.

Policies must, to achieve the former, address players in the macro (government institutions,
macroeconomic environment), micro (the private sector) and meso (enabling and
supporting institutions for the micro level) levels of the economic system (PACA, 2003).
Well-functioning markets and coherent multi-sector policies are amongst the key requisites
for sustainable development (CanREA, 2005).

67

9. A Framework for a National Energy Strategy in

Ecuador
A good starting point to define the framework conditions necessary for Ecuador to develop
a coherent National Energy Strategy is the 2004 Bonn International Conference for
Renewable Energies. Ecuador, along with other 153 countries, was represented (by a
representative from the Ministry of Energy). This international rendez-vous yielded a shared
political declaration, an international action program and a set of policy recommendations
for renewable energies (IR25).
At Bonn, Ecuador did not incur in any commitment, but was included as beneficiary for at
least two international organisations plans (REN21, 2004b):

the South American Renewable Energy Council, aimed to become the core partner
for political decision-makers for consultation and advise on renewable energies
policy and knowledge in South America; and

the Andean Programme for Energisation through Renewables, which includes the
Andean Community and aims to develop and strengthen capacities and conditions
for renewable energies projects in the region.

Within the set of policy recommendations produced by the Bonn conference, and aimed to
national governments, the following ones could be applied by the Ecuadorian government
to establish the framework conditions towards the creation of the National Energy
Strategy:
Selected Bonn policy

Suggested implementation approach for

39

recommendations

1. Develop an Overall Renewable

Energy Policy:
a. Incorporate renewable
energy into a general
energy framework based
on renewable energy
39

Ecuador
Ecuador requires an overall National Energy
Strategy, encompassing interrelated and
coherent policies for both renewable and nonrenewable energies, and energy efficiency:

Electrification and rural electrification

plans should be tuned towards the

Excerpted from (REN21, 2004b) and (CanREA, 2005).

68

resource evaluations

Strategy. Also oil, gas, mobility fuels, etc;

should be considered. Public

b. Integrate renewable

transportation should be addressed.

energy into non-energy

sector policies

Energy efficiency should also be

considered into policy-making.

Waste management should also be

considered, especially in the local level.

The policy system should be designed in

such a way that renewable-based
generation and energy carriers become
economically viable, as compared against
conventional.

2. Formulate Targets and Strategies

Official targets, strategies and timelines can

for Renewable Energy and Energy

contribute to stimulate the market, if

Efficiency:

accompanied by incentive policies.

Set clear targets with

The national electrification and rural

timelines, strategies and

electrification plans should be revised to include

implementation plans, taking

further energy sources into the planned energy

into account all sectors and

mix.

energy end uses

Also mobility-related plans should be addressed

(i.e. the biofuels program).
Other elements to take into account:

Environmental implications of
hydroelectric and other water diversion
projects

National potentials for diversified energy

sources: biomass, MSW, agricultural
waste, natural and associated gas, and
geothermal.

Energy efficiency, initially within key

energy-consuming sectors (commercial

69

and industrial, representing 40 % of the

energy demand).

Regarding energy efficiency in buildings,

it should be considered in the long term,
due to economic constraints of passing
strict building standards. A good
approach would be to continue
stimulating the utilisation of saving light
bulbs among the public, and make its use
mandatory in public buildings.

Other plans and programs to encourage

energy efficiency in the residential sector
must be undertaken, given that
residential consumption alone represents
more than 40 % of the national electric
demand.

3. Market Transformation
a. Overcome subsidies for
conventional energy
sources and other biases

Support private initiatives, and redefine

government initiatives, by means of policymaking:

Eliminate or re-focus the gas, electricity

against renewable energy

and mobility fuels subsidies (to un-bias

to establish a level playing

the market regarding renewables).

field

Modify the Hydrocarbons Law to ban gas

flaring and stimulate private initiatives

b. Establish performance-

regarding gas-fired generation and

based, gradually declining

production of LPG.

subsidies for renewable

energy sources and

Modify the waste related laws towards

restricting landfilling and banning open

technologies (such as
production tax credits and
ecological fiscal reform)
c. Provide temporary

dumping, to stimulate the utilisation of

MSW organic fractions and sewage
sludge for energy generation. Waste
management in Ecuador is a municipal

70

incentive/regulatory

responsibility, but national directives can

measures (e.g., portfolio

be formulated.

standards and feed-in

tariffs)

Subsidise renewable energies, in a

gradually declining fashion. A good role
model would be the German Renewable
Energy Act.

Redefine the feed-in tariffs according to

the new policies40.

Introduce both rewarding and penalising

policies for energy efficiency (mandatory
audits, early compliance, enforce peak
reduction, etc) and renewable energies
(e.g. renewable quota systems, feed-in
tariffs, etc).

4. Increase Public Awareness and

Support
Build public knowledge and

In Ecuador, awareness on the need for and

advantages of renewable energies is not
widespread.

support for a transition to

A national awareness campaign and other

renewable energy

recurrent information measures should be

deployed. This would help the public to
understand the governments energy policy.

5. Human Resources and

Infrastructure
Build energy efficiency and

experts, at all level, for instance, via:

Government scholarships for master

renewable energy capacity

studies in sustainability and renewables

and implement industry

abroad.

transition policies/financial
assistance

40

Support the training of renewable energies

Support for undergraduate and graduate

renewable energies programs in Ecuador

It would be necessary to redefine the capacity limitations for renewable generation set by Art.
21 of the Wholesale Electricity Market operating rule, which is designed to protect
conventional generation.

71

(using perhaps international technology

transfer mechanisms, such as Germans
GTZ and other cooperation agencies).
Develop and redirect financing mechanisms for
renewable energies (e.g. the FEISEH and
Solidarity Fund).
6. Establish Enabling Institutions
For example, a Renewable
Energy Secretariat

Given the complex implications of an energetic

transformation (e.g. subsidies modification,
market-impacting policies, etc), the national
energy authority should be an inter-ministerial
endeavour, or have voting rights in non-energy
related ministries (and vice versa).

7. Secure Access for Renewable

Energy
a. Ensure grid access and
provide transmission
capacity for green power
(including on-site sources)

Grid access is already guaranteed to private

producers by the current energy legal framework.
Nevertheless, transmission possibilities should be
offered to remote or rural producers, including
the possibility of investing and co-owning new
transmission infrastructure (mini- and micronetworks), and to develop new renewable-based

b. Support renewable energy

generation + transmission initiatives.

heating and cooling

technologies

Distribution companies should be either forced

by law or encouraged by economic incentives to
prioritise renewable electricity purchases.
Utilisation of energy generation-related heat
production should be encouraged, as well as
solar cooling and heat-to-cool conversion from
energy generation. A main pilot project in this
line would be replacing gas and electricity for hot
water (especially in the highlands) with solarthermal heating devices.

72

8. R&D and Demonstration

Increase support for
renewable energy
technologies, including

Profit on the technology transfer mechanisms

and programs from leading countries in
renewable energies and efficiency (i.e. European
Union, Germany, Japan).

heating and cooling

Support R&D in local and regional (creole)

technologies

solutions, or adaptation of foreign technology

and approaches.

9. Public Procurement
Lead by example by
purchasing green power,

For instance, to retake the abandoned biofuels

pilot programs for the main cities of Guayaquil
and Quitos public mobility.

green heat and green

Public procurement should support all energy

fuels/transport as a base for

and energy carriers initiatives that contribute to

market transformation

develop the desired energy mix in the country.

This directive should be specified in municipalguiding laws.

10. Utilize Kyoto mechanisms to

Kyoto mechanisms (i.e. CDM) are suitable for

Support Renewable Energy

Ecuador, as demonstrated by its growing CDM

Deployment

portfolio.

Use direct purchase of credits

Another source of financing for renewable

from renewable energy

energy projects could be international

projects with high

governments, programs and institutions, like for

development value through

instance: the German GTZ, the Dutch

the CDM and JI

government, the abovementioned Andean

Programme for Energisation through
Renewables, etc.
Other financing schemas that could be deployed
include micro-credit programs (in the Grameen41
style) and other non-Kyoto carbon markets.

41

The Bangladesh-based Grameen Foundation had become a worldwide role model for innovative
financing to fight poverty and boost development. See http://www.grameenfoundation.org/.

73

A set of policy recommendations for local governments was also released. In Ecuador, the
role of local governments regarding energy and related sectors (i.e. water, wastewater and
waste management) is defined, but often municipalities underperform, due to several
reasons, while addressing their local needs. The central government should deliver, besides
a coherent body of policy, normative instruments of technical character for the local
governments. Figure 9-1 depicts the constituencies of the suggested multi-sector National
Energy Strategy (NES).

Figure 9-1: Suggested National Energy Strategy for Ecuador

Source: self elaboration

9.1. Regional/local initiatives under the NES

Even though the existence of a national strategy and central government-produced
legislation and technical normative is necessary to rationalise the energy (among other
strategic sectors in the economy/society, such as waste); it is also a fundamental guideline
for sustainable development to develop solutions and strategies at the local and regional
levels. Specifically for the energy sector, it is widely acknowledged that decentralised
electricity generation and other energy-related approaches (e.g. mobility solutions at the
municipality level) are the best ways to create regional added-value.

74

Besides, the potentials are better assessed at the regional/local level. Theoretical potential
should be refined in order to be realistic: all initiatives should be technically, socially,
environmentally and economically sound; and those characteristics are region-bounded42.
Any Ecuadorian municipality, associations of municipalities (e.g. the Association of
Municipalities of Guayas), province or region willing to develop its energy potential, should
essentially carry out a regional Material Flow Management (MFM) initiative43. Therefore a
dedicated MFM-Team should be appointed and given the authority to collect information
as to design a Master Plan.
Some of the possible energy-related outcomes of such initiative at the regional level could
include, for instance:

Identification of unused biomass resources (manure, other agricultural by-products,

water hyacinth a common pest in many Ecuadorian watersheds, waste oils, etc),
and consequent material or energetic utilisation.

Sustainable production and consumption initiatives. Support for and capacity

building in Cleaner Production/PIUS44, EMAS45 and ISO14000 standards, etc.

Rationalisation of waste management by means of a separation system, towards

recycling inorganic fractions (metal, glass, paper) and energy recovery of organic
fractions (biogas) and some inorganic fractions featuring high calorific values (RDF).

Utilisation of sewage sludge from wastewater treatment systems for energetic

purposes (biogas production).

Energetic optimization of great consumers (energy and materials intense activities),

by means of behaviour change, investment in technology and renewable energy
sources.

42

43

44

45

Based on lectures by P. Heck and M. Knaus, IMAT (www.imat-master.com), IfaS, Fall-Winter,

2007.
For insights on an approach for RMFM initiatives, see Appendixes: 12.6 Approach for Regional
Material Flow Management initiatives.
Production Integrated Environmental Protection (PIUS or Cleaner Production) is a management
system aimed to increase the competitiveness of companies, leading to cost reductions,
efficient utilisation of raw materials and energy; and contributing to the optimisation of
operative processes (IR61).
The Eco-Management and Audit Scheme (EMAS), by the European Commission, is a
management tool for companies and other organisations to evaluate, report and improve
their environmental performance (IR62).

75

Foundation for eco-industrial parks, by establishing by-products exchange

mechanisms among local industries, and featuring energy generation (ideally via
CHP generators, and utilising the heat for processes).

76

Current waste management situation and policy

Waste is a great problem in Ecuador. In 2002, with a waste generation of approximately 7
500 tons/day (between 0,45 and 0,85 kg/person/day, 42 % of the total generation by 2
main cities Guayaquil and Quito), less than 50 % of the population enjoyed some kind of
waste collection and disposal system. This percentage of service coverage has been
basically the same in the last 40 years, and the non-collected wastes have been historically
dumped in creeks, valleys, rivers, mangrove swamps, etc (WHO, 2002).
From the 90s, municipalities started to charge electricity consumers with a percentage in
their electricity bills to finance waste collection. From mid 90s, sanitary landfills where built
in Guayaquil and Quito, and privatisation of waste handling started to be implemented in
the country. Current waste management practice is to a large extent inefficient,
environmentally unsound and features financial deficits.
National strategies are not well designed nor successfully implemented (inefficient
collection systems, landfill as the top disposal approach, no consideration of the waste
hierarchy, etc), and the waste sector lacks a unified and coherent law.

9.2. Sector structure and policy

Under the 1993 Law for the Modernisation of the State and related National Plan for
Decentralisation of the State, more and more competences in terms of service providing
have been transferred from the ministries to the local governments (province and
municipality levels). The ultimate goal is that ministries will be aimed in the future to craft
policies and technical guidelines. The problem is that frequently the competences are
transferred to the local governments but not the resources. The new national constitution
approved in 2008 ratifies that no further competence transfer will be done without
guaranteeing proportional resource transferences, and that a new technical organisms will
oversee such mechanism (IR30).
So far, and according to the Law of Municipal Regime, the direct responsibility for waste
management belongs to the municipalities, and they have to deal with waste services with
their own general budgets and fees (there are no waste sector-specific resource
assignations from the central government).

77

From the 90s, the Ministry of Urban Development and Housing (MIDUVI) assumed most
central governmental waste management duties (sector policies), via its Sub-secretariat of
Potable Water, Sanitation and Solid Waste (SAPSyRS). There is also an Inter-institutional
Committee for Water and Sanitation which collaborates with MIDUVI; among other waste
related stakeholders: the Sub-secretariat of Environmental Sanitation, the Solidarity Fund,
the Ecuadorian State Bank (main financial source for waste management projects), the
Emergency Social Investment Fund (FISE) and several ministries (i.e. Health, Environment,
etc), the Ecuadorian Association of Municipalities; at the national, provincial and municipal
level (WHO, 2002).
The Ecuadorian National Water and Sanitation Policy, crafted by MIDUVI in 2002 is poorly
designed and executed, since it lacks clarity regarding key issues such as investment
subsidies. Besides, the sub-ministry of MIDUVI dealing with sanitation is not an
independent organ, with ministerial power, able to negotiate budget requirements and
impose policies. Besides, MIDUVI and their sub-secretariats head positions are political
positions, very sensitive to the national political situation. During the recent national
history of political instability in 2001-2006, for instance, Ecuador had 4 presidents and the
heads of MIDUVI and SAPSyRS changed 8 times (PRAGUAS, 2007).
Regarding authority and endowment, UNEP states (in its Solid Waste Management
guidebook) that The authority of the agency assigned the responsibility for implementing
pollution control or waste management policies must be clearly delineated. It follows that
the selected agency be endowed with the expertise, human resources, equipment, and
financial resources needed to carry out the policies (UNEP, 2005a). That is clearly not the
situation in Ecuador.
Even though there are a number of waste related policies by the public sector, those are
not fully implemented due to bad design, lack of consensus among actors and lack of
institutional support. At least 30 laws, acts and rulings regulate the waste sector, including
the Law of Environmental Management, the Law for Prevention and Control of
Environmental Pollution (entitling the Ministry for Environment to demand sanitary
landfilling to municipalities) and the Rule for Management of Solid Waste. As of 2003, the
sector authorities had prepared a Preliminary of a Solid Waste Sector Law (WHO, 2003).
Apparently it has not reached yet consensus and has not been approved by the national
legislative body.

78

Among the features of the Ecuadorian waste policy sector, the following are of great
significance (WHO, 2002):

The fee structure for waste services is not regulated, and its collection is not
allowed as combined with electric bills since 2001.

Since 2000, penal legislation also includes crimes against the environment.

There are no specific regulations for urban growth, or regarding waste services for
squatter settlements.

There are no effective control mechanisms to enforce the legal framework.

Ecuador signed the Basel convention on toxic waste and the Agenda 21 sustainable
development action plan. Nevertheless, the polluter-pays principle is not applied in
Ecuador.

There is overlapping of regulations among ministries, municipalities and other

institutions regarding regulation, control, planning, policy-making, monitoring,
punishing, delivering waste services, promoting, providing technical assistance and
financing projects.

Institutional jurisdiction and responsibilities are not clearly delimited, and intersector relations are difficult. Laws, rules and regulations sometimes collide in
certain aspects.

Waste sector syndicates usually undermine modernisation efforts.

Organisations producing hazardous, toxic, chemical or infectious waste are not

clearly obliged by law to treat and neutralise their waste before delivering it to
municipal management. An exception is the Mining Law that determines the
treatment mining waste should receive before disposal.

Legally, municipalities have the obligation to deliver waste services according to technical
methods established by MIDUVI, and thus develop waste management programs and
decide upon the fees to be collected as to finance the service. Besides, municipalities are
entitled to impose, via bylaws, additional normative regarding collection, manipulation,
treatment and final dispose of wastes within its jurisdiction. Municipalities in Ecuador
either deliver the service by themselves (usually underperforming and facing financial
issues), or create municipal sanitation companies, or outsource it to private operators.
Some governmental and other initiatives have been carried out towards improving the
waste situation. Among the most representatives:

79

MIDUVI is trying to develop a Plan for the Management of Solid Waste, by means of
several projects (IR32). One of the most representatives is the Integrated
Management of Solid Waste project, involving 30 municipalities in different regions.

The World Bank-Ecuadorian government Rural and Small Town Water Supply and
Sanitation Project (PRAGUAS), which is essentially water-related, has also
contributed to waste management in small municipalities since 2001 (IR31).

Several waste collection micro-enterprises projects where executed by GTZ

between 1997 and 2000, and later continued by MIDUVI (WHO, 2003).

AME had executed several landfill projects in different cities.

With support from the Inter-American Development Bank (IADB), MIDUVI is

currently developing an Investment Plan for Solid Waste in Ecuador (IR33). This
program has identified 51 cities with more than 15 000 which feature uncontrolled
dumpsites. 11 of these cities are expected to operate landfills from 2009
(CORDELIM, 2006).

9.3. Characteristics of waste services

As of 2003, in general terms, Ecuadorian waste services were characterised by the following
(WHO, 2003):

Waste per capita urban production of 0,69 kg/day.

52 % coverage in street cleaning, 81 % in waste collection.

Final disposition: 66 % sanitary landfill, 19 % controlled dumpsite, 14 % wild

dumpsite. In non-controlled dumpsites, open incineration is common.

70 % of small and medium municipalities do not feature proper final disposal.

No formal incineration is practiced.

Formal and informal recycling account for 14 % of the generated waste.

Average cost of per ton of waste collected is US$ 15,08 while average cost of ton
disposed is US$ 11,57. Average cost of waste management per ton is US$ 43,05.
Total management cost per ton would reach US$ 70 if investment costs are
considered.

Average deficit between budgeted values for waste management and actual costs
is 90 %.

22 % of municipalities do not charge inhabitants for waste services.

80

In general, domestic, commercial, industrial and healthcare wastes are managed in

unison. Hospitals lack equipment for neutralisation of dangerous waste.

Private participation in waste services is high in big cities, and almost inexistent in
medium and small cities.

In average, collection frequencies are over dimensioned, which incurs in high

operative costs.

Community participation in waste related decisions is low.

There are generally scavengers (known in Ecuador as chamberos) associated to

dumpsites, living with their families under inhuman conditions.

There are no waste transfer stations in Ecuador, mostly due to the vicinity of
landfills to the cities and the city sizes (no Ecuadorian city over 3 million dwellers).

Waste management in Ecuadorian cities faces the issues brought by conventional

approaches, which fail to consider the differences between industrialised and developing
countries and thus yield less than optimum results. The main characteristics of solutions
usually proposed and implemented in developing countries also apply for Ecuador (see 4.2
Waste management in developing countries).

9.4. The need for a National Waste Strategy in Ecuador

As a natural outcome of the chaotic structure of the waste sector, and lack of a coherent
sector-specific legal body, waste related services are in general underperforming in Ecuador.
Until a coherent Solid Waste Sector Law is approved and enforced, no major progress is
foreseeable.
It is therefore recommendable for Ecuador to develop a comprehensive, multi-sector,
multi-stakeholder National Waste Strategy (NWS), encompassing planning and actions at
the policy, economic, regulatory, legal and operative levels. The main goal of the NWS
would be to develop a coherent body of laws, regulations, technical tools, financial and
economic tools, institutional re-alignment and in general an enabling environment for the
sectors reform towards sustainability. The NWS should feature time-bounded goals,
targets, indicators and progress measurement mechanisms.

81

Examples of waste strategies at the regional level are abundant. UKs national waste
strategy, for instance, is a good example of a nation-wide waste strategy formulation46
which is based on the waste management hierarchy; features targets, indicators and
focused policies; stimulates sustainable consumption and production; is expected to reduce
GHG emissions; and includes several categories of stakeholders (business, retailers,
consumers, local authorities and the waste management industry) into waste
rationalisation responsibilities (IR34).
Of course, the reality of developing countries like Ecuador is much different from the
developed, industrialised world, but nevertheless Ecuador should attempt qualitative
improvements to its national situation rather than quantitative. Ecuador should learn from
success stories in other countries but also engage in an Ecuadorian way to capacity
development in waste management.

46

The actual performance of that strategys implementation is, nevertheless, discussed.

82

10. Suggestions for a National Waste Strategy in

Ecuador
The leading foundation for a NWS should be its sustainability. The policy-derived waste
management solutions should be economically, socially and environmentally sound. A first
step would be to include as the very foundation of the NWS the waste management
hierarchy (see Figure 4-1): reduce, reuse, recycle and disposal (including recover,
incineration and landfilling).
A subset of the waste management hierarchy is the 3R, or reduce-reuse-recycle. The NWS
should consider policy and market instruments as to create an enabling environment for 3R,
and contribute to education and awareness building and capacity building, as well as
financing 3R initiatives (UNEP, 2006). 3R components are described in the following relation
of key aspects be considered for the NWS:
First: it is important to include and assign responsibilities in the waste management to all
involved stakeholders, namely households, all economic value chains47, and all directly
related governmental instances.
Second: it is desired the promotion and support for the creation of Integrated Waste
Management Systems (IWMS) at the municipal or association of municipalities level. An
IWMS is a framework for the development (a new system or optimisation of an existing
one) of a comprehensive waste management system (also refers to the system itself) aimed
to reduce, collect, recycle and final disposal of (liquid or solid, hazardous or not) waste
generated by residential, institutional, commercial, and industrial actors (UNEP, 2005a)
(IR36). A main goal of IWMS in Ecuador should be to divert organic fractions from landfills,
and in general reduce the volume of wastes reaching the landfills.
Third: a fundamental element for the countrys development (and creation of proper waste
management systems) should be the top-down approach from the central government of
banning the extended practice of open dumping, and establish a timeframe for limiting

47

Reduce and recycle is often possible in industries, for instance by means of Cleaner Production
practices, in case the polluter-pays principle is applied.

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landfills depositions48 once the national conditions allow it. A comprehensive national plan
for waste management should be developed, providing legal, technical and economic
assistance to municipalities to rationalise the waste management. A proper waste
management strategy would include the development of supporting mechanisms for:
separation at the source (previous educative campaigns), recycling schemes, inclusion of
scavengers, integration of the organic fraction 60 to 70 % in Ecuador (IR14), 72 % (WHO,
2002) into the energy strategy, support for private initiatives and, especially, banning of
dumpsites.

Support for scavengers to engage in associations, cooperatives and other forms of

legalisation and collaboration is a fundamental topic in waste management. The
informal recovery of materials from waste represents an important survival strategy
for disadvantaged populations throughout the developing world. Waste pickers are
perceived as the poorest of the poor and marginal to mainstream economy and
society. In many cases, they are subject to exploitation and discrimination by
middlemen and by local and federal government policies. [] when scavenging is
supported ending that exploitation and discrimination [i.e. via cooperatives] it
represents a perfect illustration of sustainable development that can be achieved in
the Third World: jobs are created, poverty is reduced, raw material costs for
industry are lowered (while improving competitiveness), resources are conserved,
pollution is reduced, and the environment is protected (Medina, 2005).

Fourth: the waste management aspect of revalorisation of by-products could include the
issue of agricultural wastes. Nowadays, materials such as straw, vegetable peels and rice
husks are simply burned down in the open or dumped in the nature. Such materials should
also be integrated into the national energy strategy (for biogas, co-firing, etc) by means of a
combination of legislation and technical-economical alternatives.
Fifth: yet another key aspect of waste management that could be pushed and supported
from the governmental level (policy) is recycling. By a combination of regulatory and
market mechanisms, a formal recycling culture can be created, given that a national market
for recycled paper, glass, metals and plastics already exists in Ecuador, but should be
understood and included as a stakeholder (IR37). For instance, legislation can forbid non48

For instance, landfills should be allowed to dispose only inert materials with no further
utilization or possibility for energy or material recovery.

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returnable soda bottles, or demand supermarkets to provide recycling points for glass and
municipalities to create recycling points in public markets (both measures aimed to develop
a deposit system for glass containers). Reduce and reuse attitudes can also be supported to
encourage the industry.

As an element of recycling, but also of waste minimisation, the use of plastic bags
can be discouraged, for instance, by imposing a tax that undoubtedly would be
transferred by the retailers to the final customers49. If combined with educative and
awareness campaigns, the use of plastic bags for shopping could be reduced, as
successfully done in many European countries. Also, use of decomposable
packaging can be stimulated, useful if separation at source is also implemented.

Sixth: engage in national projects or initiatives that essential for the enabling environment
required to execute the National Waste Strategy include50:

National inventory of final deposition sites (dumpsites, landfills)

National program for the promotion of IWMS, which would include:

o

National plan for closing dumpsites, and shifting dumpsites into controlled
dumpsites and sanitary landfills51

National program for neutralisation of healthcare waste

Creation of a Sub-secretariat for waste within the Ministry for the Environment, or
an authority and budget imbued inter-ministerial organisation (like the Interinstitutional Committee for Water and Sanitation) to deal with all the policy,
normative, technical and economic aspects of waste management at the central
government level52. Such institution should provide technical, social, environmental,
match-making and financial consulting services to municipalities.

Implementation of the polluter-pays principle, for the industry to take

responsibility for all their waste and waste water. Such an approach should be

49

50
51

52

Other uses of blow-extruded plastic films, such as mulch for agriculture, stationary and certain
food packaging should not be disrupted.
Partially based on (WHO, 2002).
Turning dumpsites into sanitary landfills should be a temporary measure, if not possible to
immediately engage in innovative, state of the art waste management schemes featuring
materials and energy recovery.
A Ministry for Waste would fail to generate synergies within the productive and energetic
sectors, due to high specialisation. Waste management is an interdisciplinary and multi-sector
endeavour.

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combined with Cleaner Production-oriented initiatives, awareness raising,

sustainable production and consumption initiatives, etc.

National guidelines for technical determination of waste management tariffs

Allocation of a national budget for waste management, to be partially assigned to

municipalities

National plan for integrating waste energetic recovery possibilities into the national
energy strategy

National portfolio of economic and financing instruments for waste management,

based on MIDUVIs Investment Plan for Solid Waste in Ecuador. An Environmental
Fund should be established to finance investment in waste treatment (IR37).

10.1. Guidelines for IWMS under the NWS

An IWMS should consider all technical and non-technical issues of waste management,
since holistic approaches to such a complex inter-sector matter must prevail for a sound
performing system. An integrated approach also leads to resource optimisation, synergies,
inclusion of all stakeholders, economies of scale, better cost/benefit evaluations, balance
between revenue and cost centres, etc. It is vital to consider the waste management
hierarchy within the IWMS, and strongly aim to avoid the organic fraction to reach the
landfills.
An IWMS should include, to some extent, the following (UNEP, 2005a):

setting policies;

developing and enforcing regulations;

planning and evaluating municipal MSWM activities by system designers, users, and
other stakeholders;

using waste characterisation studies to adjust systems to the types of waste

generated;

physically handling waste and recoverable materials, including separation,

collection, composting, incineration, and landfilling;

marketing recovered materials to brokers or to end-users for industrial, commercial,

or small-scale manufacturing purposes;

establishing training programs for MSWM workers;

carrying out public information and education programs;

86

identifying financial mechanisms and cost recovery systems;

establishing prices for services, and creating incentives;

managing public sector administrative and operations units; and

incorporating private sector businesses, including informal sector collectors,

processors, and entrepreneurs.

10.1.1. Financing
The main constraint for IWMS initiatives in Ecuador are financing, duration and
acceptability by all stakeholders. Currently most waste related investment is provided by
the State Bank, along with international institutions like GTZ. Time spans of public projects
in general are a constraint, especially for local government officials who are very vulnerable
to political pressure and generally more concerned to execute more short-termed and
visual works (UNEP, 2005c). Any Ecuadorian municipality willing to develop an IWMS
should essentially carry out a regional MFM initiative, ideally in combination with an energy
rationalisation program53.
Financing of IWMS under the suggested strategy would be managed by the National
program for the promotion of IWMS, and the sources would be listed in the National
portfolio of economic and financing instruments for waste management. Those sources
would include:

NWS-derived national budget for waste management and Environmental Fund.

Other existing funds such as the Solidarity Fund and the Emergency Social
Investment Fund.

Founding by international organisations and programmes such as UNEP, GTZ, WHO,

etc.

Private (domestic and foreigner) investment encouraged by the NWS-derived

enabling policy environment and by carbon trading opportunities (i.e. CDM
potential).

Besides, municipalities engaged in the development of an IWMS can rely on the private
sector. Subcontracting or outsourcing of waste services to the private sector should feature
three key components: competition, transparency and accountability. Monitoring and

53

See Appendixes: 12.6 Approach for Regional Material Flow Management initiatives for
insights on an approach for RMFM initiatives.

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control by the contracting authority is indispensable. Also, and as an alternative for big
contracting companies, micro or small labour-intensive enterprises can be created or hired
to deal with waste collection in small communities or squatter districts in big cities
(Zurbrugg, 2003). Such approach not only improves collection levels, but also contributes to
job creation and even to recyclability. In poor or non-serviced areas in big cities this
approach has been very successful (UNEP, 2005b).

10.1.2. Management of different waste fractions

When an IWMS is developed for a certain location, much likely some kind of solid waste
disposal is already in place. The suggested National plan for closing dumpsites, and shifting
dumpsites into controlled dumpsites and sanitary landfills should support municipalities
through the complexities and implications of dumpsite closure and remediation, as well as
setting up a sanitary landfill (if not better alternative is immediately available).
An IWMS should pay considerable attention to the development of solutions for the organic
fraction. It is important to reduce the organic fraction, and avoid it to reach the landfills
because it constitutes the largest single fraction, and it is source of GHG emissions and
public health issues. Solutions for the utilisation of organic fractions of MSW include
anaerobic digestion to produce biogas and agriculture-suitable digestate 54 , separate
collection to feed pigs, etc. Figure 10-1 depicts the two main approaches to reparation: at
the source and at the disposal site.
It is always a difficult issue to engage population from developing countries in separation at
the source. To sustain separation practices and support separate collection protocols,
high-income cities operating source separation systems rely upon a combination of civic
commitment, environmental consciousness, convenience of deposit, public education,
mandation and enforcement. In Southern cities, the capacity to draw upon such motivations
and to provide suitable incentives is weak (Furedy, 1999). Thus it is vital to understand and
develop the factors which would engage population in source separation, if preferred over
disposal site separation. Those factors may include habit, economic incentives for
separation (reuse, recycling, utilisation of organic fraction, etc), religious or cultural factors,
charitable motives, socio-economic status, status and wages of household servants, space
54

May include post-composting, but composting alone of fresh organic substrates is usually
energy intensive and GHG emissions intensive. Is it thus not a best practice solution for organic
fractions of MSW.

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in the household, convenience of disposing of separated materials, environmental

education, and gender.

Figure 10-1: Modalities of waste separation

Source: (Furedy, 1999)

Technology-based separation at the disposal site, despite being feasible under certain
conditions, is usually not suitable for developing economies, mostly due to economic
reasons. Therefore, tailored solutions are to be created in developing countries to address
separation. Successful initiatives in other developing countries could inspire that kind of
solutions in Ecuador (see 4.2 Waste management in developing countries).
In general, an IWMS including separation and separated collection must consider the costs
of publicly-organised collection and sale, the local capacities for recycling, and other
economic and managerial factors, and also the fact that centralized drop-off and buy-back
systems are usually cheaper than door-to-door (or kerbside) collection, even though those
systems feature several disadvantages (Furedy, 1999). A good approach would be to organise
separate collection by integrating scavengers and kerbside pickers.
A fundamental issue to be addresses by an IWMS is the treatment and disposal of
healthcare waste. Legislation could demand on-site neutralisation of such wastes, but that

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is not practical in Ecuador due to the budget constraints of hospitals and other healthcare
institutions. A solution could involve municipality-run incinerators, or private-operated
autoclave or incinerating facilities.
Besides, separation of dangerous and MSW can be done on site to reduce the volume of
waste to receive special treatment. Separated collection of the dangerous fraction should
also be considered. The suggested National program for neutralisation of healthcare
waste should support municipalities in dealing with those issues.
Other special wastes to be considered are tires, oils, batteries, construction and demolition
rubble and sewage sludge; all of them usually ending up in landfills and dumpsites
(batteries being often recycled in unsustainable ways). An IWMS can approach those
wastes in several ways:

Tires can be turned into RDF to be sold to the industry (used oils can be sold
directly, for instance, for cement kilns), solution that requires a shredding facility
and a waste oil collection system.

Disposing used industrial, mobility and restaurant oils in the sewer system can be
banned by law, and either a field collection system or centralised recovery points
can be implemented. Domestic used oils can be recovered via educative/awards
campaigns, for instance, targeting school kids to take their households waste oil to
school, to be processed into biofuels.

Industrial waste in general can be commanded by law to be treated by the

generating industry, under the polluter-pays principle.

Batteries can be collected with other recyclables and entrusted to regulated

foundries.

Sewage sludge can be offered to cement factories, after sun drying.

10.1.3. Social issues: integration of informal actors

IWMSs should consider the integration within the new management schemes of all people
currently engaged in economic activities based on the waste (scavengers, kerbside pickers,
etc). Scavengers represent a large proportion of developing societies, estimated in at least
2 % of the population. NGOs play an important role in developing countries in social aspects
related to waste, and therefore constitute an important stakeholder in waste management
(Lepsoe, 2006). Many scavenger and kerbside picker integration programs in the world
have been initiated by or in cooperation with NGOs.

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It is necessary to identify the amount and level of organisation of existing scavengers. Also,
determine in which kind of informal recycling activities they currently engage. A number of
informal recycling activities have been identified (Medina, 2005):

Source separation at the household or place generating waste materials.

Collection crews sort recyclables while on their collection routes (i.e. before
pressing the waste in the compactor truck).

Kerbside pickers retrieve recyclables prior to the disposal of the refuse they pick up
(i.e. those collecting waste in carts or bicycle-cars).

Itinerant buyers purchase source-separated recyclables from residents (i.e. paper,

cloth, broken house appliances, etc).

Waste pickers retrieve materials at the communal storage sites, as well as from
commercial and residential containers placed kerbside.

On the streets or public spaces, picking up litter.

In vacant lots, where garbage is dumped, as well as in illegal dumpsites.

In canals and rivers that cross urban areas carrying materials dumped upstream.

At composting plants.

At municipal open dumps.

At landfills.

Supportive policies for scavengers integration include: legalization of scavenging activities,

encouraging the formation of waste picker cooperatives, awarding of contracts for
collection of mixed wastes and/or recyclables, creation of PPP between local authorities
and waste pickers, etc. Elimination of scavenging is almost impossible and counterproductive: Efforts to eliminate scavenging and to encourage waste pickers to engage in
other occupations usually fail. Authorities often ignore waste pickers opinions. Studies have
found that when scavenging is tolerated or supported, waste pickers can earn higher
incomes than unskilled, formal sector workers. Landfill scavenging ban had a serious
negative impact on waste pickers income and standard of living (because they spend more
time wandering the city). Similar experiences have been observed in other Asian and Latin
American cities (Medina, 2005).
In general, new waste management schemes should be used to generate additional jobs,
for instance, by preferring labour-based solutions rather than technology-based ones (i.e.
micro-enterprises for collection in squatter settlements, cooperatives for kerbside

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collection and recycling, etc). Low-tech, low-cost, and labour-intensive waste management
schemes can undoubtedly yield social, economic, and environmental benefits. Nevertheless,
when high-tech solutions are feasible and suitable, still labour-intensive tasks can be
assigned to former informal waste scavengers and recyclers.

10.2. Potential for material and energy recovery from waste

streams
Main cities like Guayaquil, Quito and Cuenca are running gas flaring projects related to their
landfills, but no waste management systems are in place, as to make suitable biogas
production out of the organic fraction. As mentioned, each and every municipality in
Ecuador is entitled to deal with the districts waste management, but virtually only the
three main cities feature sanitary landfills.
Up to 5 landfill gas CDM Ecuadorian projects55 are registered in the UNFCCC database (and
this number may grow). Nevertheless, and despite landfill gas flaring not being aligned with
sustainability principles, methane-related projects from landfills could still be considered,
while they are profitable, strictly under the CDM. Current identified potentials include the
following estimations (CORDELIM, 2006):

Annual generation of methane by the 3 largest cities: 38 621 tons

Annual generation of methane by 5 cities with more than 15 000 inhabitants

(featuring controlled landfills): 3 047 tons

Annual generation of methane (as an average) by 11 cities with more than 15 000
inhabitants (featuring uncontrolled systems for final disposal, identified under the
IADB/MIDUVI Investment Plan for Solid Waste): 7 253 tons

Given the composition of solid waste in Ecuador, a series of sustainable energy and
material recovery (which leads to waste reduction) projects could be implemented at the
municipal level. Waste composition is as follows (WHO, 2002):
55

From 2012 onwards, it is unpredictable whether landfill gas flaring will be considered as
redeemable emissions reduction under the post-Kyoto Protocol agreements, post 2012.
Landfill-derived emissions reduction is one of the main CDM project sources in Ecuador, being
the others emissions from the oil industry (utilization of associated gas), agro-industry
emissions (fossil fuels substitution by biomass, methane recovery from beer and plant oil
wastewater treatment) and hydropower projects. Those three areas are recognized as priority
for CDM stimuli by the National Authority for CDM (Ministry for Environment) and CORDELIM,
the CDM promotion office (IADB, 2006).

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organic: 71,4 % (5 298 ton/day)

recyclables: 1 371 ton/day

o

paper: 9,4 %

plastics: 4,5 %

glass: 3,7 %

metals: 0,7 %

Those percentages are national averages, but each municipality should carry out a waste
characterisation project before making material or energy recovery decisions.
Most landfills and dumpsites face space problems, which is the natural consequence of any
end-of-pipe solution to waste. Municipalities would be interested in reducing the volume of
waste to be finally disposed, and the most sustainable way of doing so is via recycling and
utilisation of the organic fraction (ideally for energy recovery). Non-recyclable and/or
organic fractions could be transformed into refuse-derived fuel (RDF) for energy recovery
purposes, a virtually inexistent practice in Latin America56.
Several fractions of municipal solid waste can be turned, after some type of screening for
metals and glass, into RDF to be used as substitute for fuel in industrial processes. The
heterogeneous MSW used for RDF includes waste tyres, waste oils, spent solvents, bones,
animal fats, sewage and industrial sludge (e.g. paint sludge and paper sludge), nonhazardous packaging or other residues from industrial/trade sources (e.g. plastic, paper and
textiles), biomass (e.g. waste wood and sawdust), other combustible residues (WRc, 2003).
Yet another approach to volume reduction is incineration (with or without energy recovery),
but this approach has not been practiced largely in Latin America, mostly due to economic
reasons. Other approaches that have proved unsuccessful in the region are large-scale
composting and anaerobic digestion (UNEP, 2005b).
Both anaerobic digestion to produce biogas and reduction of waste to RDF have proved
very successful in Europe, but under different conditions of those in developing countries.
European municipalities feature separation systems and there is a local market for RDF (i.e.
cement industry). Besides biogas production is mostly based on agricultural wastes. In Latin
America separation is a main issue, and there is no spread market for RDF. Nevertheless,
56

One of the few RDF initiatives in Latin America is associated to the Marga-Marga waste
management project in Chile, described in 4.2.

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both types of initiatives could be feasible if supported by CDM (Lechtenberg, 2008), market
development, separation strategies, integration with national energy strategies, etc.
To address the recyclable fraction, and thus reduce the stress on final disposition sites,
alleviate environmental impacts, create employment and in general create value as
opposite to spend money, municipalities have a number of feasible alternatives to consider,
for instance:

Big cities (Guayaquil and Quito) should consider programs for large-scale recycling
of paper, metals and glass; which considered being both profitable and
environmentally sounding. Recycling can be done in a number of ways, but should
always try to integrate scavengers and other workers who currently do informal
recycling (UNEP, 2005b):
o

Collection of recyclables in supermarkets, markets, schools and other mass

meeting points in combination with educational and awareness programs
can be very successful. Even vendor-specific campaigns should be
encouraged as CSR initiatives.

Kerbside pickers and scavengers sell their pick to intermediaries who resell
to large recycling companies. Those informal workers could be formalised
into a municipal company, or a small enterprise as to provide them more
stability, increase the collection ratios and bypass the intermediaries for
better incomes.

Municipal recycling facilities can be built in landfills and controlled

dumpsites, for the benefit of scavengers and to reduce the load on the
landfill or controlled dumpsite. Recyclers should be formalised into a
cooperative or micro-enterprise.

Municipal or regional centres for revalorisation of construction and demolition

rubble, which can be used for roads, levelling and other public works (WHO, 2002).

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11. Conclusions
It is undeniable the need in Ecuador for a national strategy addressing energy and energy
carriers, given the historical inefficiency of the states approaches to energy, its economics
and logistics. The framework towards a National Energy Strategy proposed in this paper
could indeed help governmental decision-makers in Ecuador to acknowledge that
fundamental need, and devise the set of policy and economic conditions required to build
the NES upon.
Two remarkable policy aspects pointed to in this paper are the states subsidy policy and
the need to utilise the nowadays flared associated gas from the oil industry. Both aspects
negatively contribute to the energy problem in Ecuador, and should be integrated with the
energy mix goals of the government: 80 % hydropower plus a share of other renewable
sources. Such goal is feasible, as demonstrated in Appendixes: 12.7 A timeline for
renewable energies development under the NES.
The resistance to the suggested approach perceived as due to economic constraints
can be reduced by acknowledging the increase in electric demand of the country, and the
high costs of the current state of affairs. Investment in a new energy conception is
necessary for the country to continue its path towards sustainable development; but also
both the government and the market to realise the following:

Energy management-derived energy efficiency and peak curbing measurements are

key to rationalise generation needs: unused energy is the cheapest possible energy
form.

Decentralised renewable energy initiatives can contribute to national electrification,

private sector development, and alleviation of the electricity generation pressure
over the state.

Unused potential sources of energy are to be tapped, and interdisciplinary/intersector initiatives are to be developed as to address several issues concurrently (i.e.
waste-to-energy as both energy solution and MSW solution).

If Ecuadorian energy situation is in need of reforms; waste situation is in critical condition.

To address the poor waste management state of affairs, creole Ecuador-specific solutions
are to be developed. Those solutions can be modelled around success cases of best

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practices in other Latin-American countries, but also could learn lessons from other
developed and developing countries experiences.
Regarding experiences from developed/industrialised countries, Ecuador should leapfrog
those developments. While profiting out of the accumulated experience of industrialised
countries, Ecuador could overrule the Kuznets curve that states a country is likely to
grow economically before starting to consider environmental aspects.
In tune with the former, it is essential for Ecuador to craft a National Waste Strategy to
create the institutional and policy apparatus necessary for the waste sector to further
develop; and of IWMS for municipalities to manage waste in a sustainable way. A couple of
key aspects of IWMS in Ecuador should be the integration of the currently marginalised
kerbside pickers and dumpsite scavengers, as well as the stimulation of micro-enterprises
to extend the service coverage in an economically sound way. A case study for qualitative
enhancement of the waste management in the city of Guayaquil is shown in Appendixes:
12.8 Case Study: Suggested approach for waste management in Guayaquil.
Material and energy recovery from waste streams could be important in Ecuador, given the
existence of established recyclables markets and the Kyoto Protocol-derived possibilities of
carbon financing for renewable energies initiatives, including those based on waste. As the
case study of Guayaquil shows, even the best waste management scheme in place in the
country has a long way towards sustainable waste management. The lack in organised
separation and derived potential benefits such as material and energy recovery and
extending the landfill life is specially seen as potential to develop economic alternatives.
Existing informal recycling activities and planned landfill-based separation activities are
perceived as factors to consider within the new solutions.
This paper concludes that there is huge potential for economic enhancement of the waste
situation, and that one of the main barriers to develop that potential is a lack in
organisation. Investment in suitable technology and education is essential to escape the
sub-optimal approach to waste management as a disposal problem. High-tech solutions can
be feasible (i.e. as in the Marga-Marga project) and should not be rejected without careful
economic analysis.
Overall, the suggestions introduced in this paper are based on the awareness of
environmental, sustainability-imbued solutions to waste and energy management as being

96

feasible and even preferable to conventional alternatives from the economic perspective,
as well as more socially-sound. Those suggestions are aimed to the construction of a
Circular Economy, which starts in the municipality/regional level. MFM approaches provide
the tools for feasible yet innovative ways to deal with pressing issues like waste and energy
in a sustainable way.
Further research after this paper would draft workable proposals for national energy and
waste strategies, to be presented for public and political consultation.

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Section III:
Appendixes and References

98

12. Appendixes
12.1. Status of renewable energy technologies: characteristics
and costs
From Renewables 2007 Global Status Report,
by The Renewable Energy Policy Network for
the 21st Century (REN21).

99

12.2. Alternatives to fossil fuels for heating and cooling

From State of the World 2009: Into a Warming
World by the Worldwatch Institute.

100

12.3. Kyoto Protocol and carbon markets, emphasis on

developing countries
Based on A. Avad, 04.2008, The World Bank
Group: perspectives for climate change action
after 2012, GHG Abatement and Carbon
Trading Strategies, IMAT, IfaS.
The Kyoto Protocol is an international environmental treaty, managed by the United
Nations Framework Convention on Climate Change (UNFCCC) and signed at the United
Nations Conference on Environment and Development (UNCED) held in Rio de Janeiro,
Brazil, from 3 to 14 of June, 1992. The conference is also referred to as the Earth Summit.
The Kyoto Protocol is basically a cap and trade system that imposes national caps on the
emissions of Annex I countries57. On average, caps require countries to reduce their
emissions 5,2 % below their 1990 baseline over the 2008 to 2012 period (WB, 2006).

12.3.1. Carbon strategies under the Kyoto Protocol

The main outcomes of the Kyoto Protocol are basically agreements and tools. It was agreed
that industrialized countries those with very high per capita GHG emissions need to
reduce their consumption of fossil fuels, improve agricultural practices, and conserve
forests and other ecosystems that absorb carbon from the atmosphere. Developing
countries whose per capita emissions are generally much lower, are concerned with
meeting their immediate energy needs rather than reducing their emissions, while suffering
from climate change. Therefore, developing countries are in need to engage in sustainable
development, even though they do not have reduction obligations under the Protocol.
The Kyoto Protocol flexible clauses aimed to persuade the developed countries to sign the
convention:

CDM allows Annex I countries (developed countries) the emission of quantities of

GHGs provided that they will commit themselves to invest in developing countriesbased programs that compensate for their contamination. Namely, forestation and
the preservation of green areas capable of absorbing carbon dioxide and
transforming it into oxygen (carbon sinks). This mechanism provides a satisfactory

57

The Marrakech accords in 2001 established the rules and mechanisms for Kyotos cap-and-trade
system.

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solution to all parts; even if there is no reduction of GHGs emissions, they would be
compensated, and resources would flow to developing countries. The CDM leads to
carbon trade.

Joint Implementation (JI) refers to emissions reduction projects developed among

Annex I and Annex B countries (transition economies).

Emissions Trading refers to the trading of pollution rights or allowances, that is to

say, the possibility for a firm to purchase the right to emit more tons of CO2equivalent than allowed by its Kyoto Cap, from another firm with excess.

CDM and JI projects are considered offset projects. Market experiences suggests that the
cost of purchasing an offset from a project tends to be 15-32 % lower than trading for an
allowance in the open market. Credits produced by CDM projects are called Certified
Emission Reductions (CER) and credits produced by JI projects are called Emission
Reduction Units (ERU) (CSG, 2007).

12.3.2. World carbon trading and carbon funds

Under Kyoto Protocol, buyers of credits are often companies that expect their emissions to
exceed their quota Assigned Allocation Units (AAUs), allowances. Those companies
would purchase credits directly from another party with excess allowances, from a broker,
from a JI or CDM developer, or on an exchange. National governments having a net deficit
of allowances would buy credits for their own account, mainly from JI and CDM developers.
Such deals can be done through a national fund or agency or via collective carbon funds
such as the Prototype Carbon Fund.
Allowances and carbon credits are tradable instruments with a transparent price, therefore
subject to speculation. A high volume of trading reaches the secondary market, helping to
keep down costs and stabilise CO2 prices. This market has grown substantially, being valued
at about $ 60 billion in 2007. The European Union Emission Trading Scheme58 (EU ETS) is
currently the most representative emissions trading scheme in the world.

58

Like the Kyoto Protocol CDM, the EU ETS makes use of flexible mechanisms by which developed
countries can buy emission reductions through climate-friendly projects in developing countries
and count those reductions as part of the Protocols established target of reducing emissions by 5
percent by 2012 in industrialized countries, as compared with 1990 levels.

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Developing countries had begun in the last years to participate meaningfully in the market
and contribute real emission reductions. In 2005, the market share of CDM credits from
developing countries was about 49,2 % of overall volumes transacted globally. In the
quarter of 2006, the CDMs market share of the overall carbon market volume was about
27,2 %. JI remained a very small contributor at about 4,7 % of project-based volumes (about
2 % of the entire volume of carbon markets), and at relatively low prices, situation that
reflects the perception of regulatory and institutional risks. European and Japanese private
entities dominated the buy-side of the market, scooping up nearly 90 % of all transacted
project emission reductions in 2005 and 2006, while China59 was the dominant player on
the sell-side (WB, 2006).
The CDM and JI credits markets grew by 300 % as compared to 2005. Initial estimates by
the World Bank (WB) indicate that transactions for the first 3 months of 2007 were
equivalent to all transactions in 2006 (CSG, 2007). Figure 12-1 shows the global carbon
trading volumes between 2004 and 2008.

Figure 12-1: Global Carbon Credit Trading Volume, 2004-2008, US$ billions
Source: (WEF, 2009)
59

China have demonstrated their commitment to support sustainable development by announcing

that they intend to re-invest significant proceeds from the sale of carbon credits from
HydroFluoroCarbons and other gases to support renewable energy development through the
China Clean Development Mechanism Fund (WB, 2006).

103

Some of the most representative carbon funds, mainly designed to finance projects in
developing countries, are (WB, 2002):

The Prototype Carbon Fund (PCF): The PCF was created on July 20, 1999 by the WB
as a multi-donor trust fund. At its second closing on October 31, 2000, Canada,
Finland, Japan, the Netherlands, Norway, and Sweden and 17 private sector entities
had approved their participation in the PCF, bringing the size of the fund together
to $ 145 million. The contributions are used to purchase GHG emission reductions
fully consistent with the Kyoto Protocol and the emerging framework for JI and
CDM. Emission Reductions Purchase Agreements have been signed for projects in
Latvia, Uganda, Brazil and Chile. The initial capital of the PCF was $180 million.

The Community Development Carbon Fund (CDCF): After the World Summit of
Sustainable Development in Johannesburg, 2002, the WB launched the CDCF to
target small projects in least developed countries and rural areas of all developing
countries which would miss out any benefit on the international carbon market
without any targeted intervention. This fund aims to catalyze private capital to the
poorest of the poor. Projects funded under the CDCF will pay particular attention
on the benefits for the local community and monitor such benefits together with
the creation of the emission reductions. The price for such Development+Carbon
emission reductions would be slightly higher than the emission reductions
purchased under the PCF. The initial capital of the CDCF was $ 128,6 million.

The BioCarbon Fund (BioCF): The WB developed a prototype BioCarbon Fund to

demonstrate benefits and test rules and methods for carbon sequestration
activities in CDM and JI. In doing so, the BioCF will provide financial resources to
projects that conserve biodiversity, combat desertification, alleviate poverty and
improve sustainable livelihoods.

In the context of the December 2007 Climate Change Conference in Bali, Indonesia and the
December 2008 4th Meeting of the Parties to the Kyoto Protocol (CMP 4) in Pozna,
Poland60; it was launched the Kyoto Protocols Adaptation Fund, to finance concrete
adaptation projects in developing country Parties to the Kyoto Protocol. The fund was
entrusted to an international board of directors, the Adaptation Fund Board, which relies
on the GEF (secretariat services) and the World Bank as trustee (IR58).
60

Which took place after the 2008 US election but before the Inauguration of President Obama.

104

As of March 2007, carbon funds totalled US$ 11,8 billion, and the private sector provided
most of the new money flowing into the market. Investment flows massively towards CDM
and JI projects, and especially to renewable energies. For instance, 64 % of registered CDM
projects where of renewable energy (wind, geothermal, tidal, hydro, biomass or solar) and
energy efficiency. Additionally, the creation of 12 new funds brought the total number of
carbon funds to 58 (UNEP, 2007).

105

12.4. Nature of policy instruments

Based on (CSCP, 2006) and A. Avad, 03.2008,
Policy instruments for resource efficiency: an
overview, Factor X, IMAT, IfaS.
Policy instruments, regardless if national, regional or local, fit into several categories (and
taxonomies) and feature some remarkable characteristics. Policies can be soft or hard,
if those terms are understood in relation to the level of tangibility of the factors affected by
the instrument. For instance, hard factors are finance and technology, while soft factors are
information, education and awareness.
According to the UNEP/Wuppertal Institute Collaborating Centre on Sustainable
Consumption and Production (CSCP), a main actor in the sustainability scene, policy
instruments can be arranged in the following categories: regulatory, economic,
informational, cooperation and educational.
In general terms any instrument, regardless of its categorisation, works on the base of one
of the following effects/actions:

Reward/Penalise: Governments can establish reward mechanisms for the

environmentally responsible producers and consumers, and/or penalise polluting
or inefficient producers, therefore creating incentives to improve environmental
behaviour.

Motivate: Governments can motivate and support producers and consumers, by

means of providing concrete resource efficiency incentives, to engage in certain
resource efficiency challenges together.

Support: Governments can support producers and consumers to profit out of

existing resource efficiency opportunities through information and education,
among other communication means.

Even though policies can have specific environmental purposes, they should address at the
same time economic and social aspects 61 , that is to say, contribute to sustainable

61

For instance, as energy is (together with agriculture) the most important factor for the
achievement of the Millennium Development Goals, local or national policies should not make
difficult for the poor to access energy nor to produce (renewable) energy. Rather, policies should
support the opposite! For example, energy-related subsidy reduction designed to encourage

106

development. The policy mix should fit the local, regional or local circumstances and
production/consumption situation, but also oftencombine soft and hard factors to
simultaneously reward, penalize, support and motivate producers and consumers.
Most policy initiatives, or at least most of the published and documented ones take place in
developed countries and regions: European Union, North America, Japan, etc. In developing
countries like Ecuador, regardless of environmental acts being in existence and continuous
new legal enforcements being deployed, some companies manage to avoid compliance by
means of legal or illegal tricks62.
The CSCP identifies the following policy instruments:

Regulatory: Norms and standards, Environmental liability, Environmental Control

and Enforcement;

Economic: Environmental taxes, Fees and User-Charges, Certificate Trading,

Environmental Financing, Green Public Procurement, Subsidies;

Research & Educational: Research and Development, Education and Training;

Cooperation: Technology Transfer, Voluntary Agreements;

Informational: Eco-labelling, Sustainability Reporting, Information Centres,

Consumer Advice, Environmental Quality Targets and Environmental Monitoring.

62

energy efficiency should perhaps be segregated in base of the source of generation and/or the
poverty level of the consumers.
For example, Ecuadorian law include specific laws, regulations, norms and standards regarding
environmentally-conscious oil exploitation, since the early 70s, but transnational oil companies
manage to ignore them by means of legal and economic pressure, as well as so called scientific
evidence, while inflicting severe damage to the rainforest. Illustrations of this issue can be found,
among other sources, in:
TED Case Studies - Ecuador Oil Exports http://www.american.edu/TED/ecuador.htm
(Retrieved 13.03.2008)
Texaco in Ecuador - Environmental and Health Claims
http://www.texaco.com/sitelets/ecuador/en/responsetoclaims/default.aspx (Retrieved
13.03.2008)

107

12.5. Biomass to fuels conversion routes

Based on several sources, mostly (IEA, 2007)
and (UNDP, 2000).

108

12.6. Approach for Regional Material Flow Management

initiatives
Based on A. Avad, 10.2008, Approach for
Regional MFM: From ideas to attainable MFM
projects, MFM Research Seminar II, IMAT, IfaS.
MFM is the approach of identifying and developing the sustainability-related potentials of a
human system, in terms of materials (i.e. raw materials, by-products, waste streams) and
energy. When carried out at a regional level, it encompasses the economic dynamics of the
whole region.
The need for regional MFM initiatives in most regions of the world is clear: due to the
dynamics of nowadays world economy, to optimise resource and energy utilisation towards
sustainability is the only way for regions and countries to guarantee the future generations
better or at least not worst living standards. Nevertheless, and especially in developing
countries, the triple bottom-line of sustainable development is often not as important for
the decision makers as the pure economic potentials of a project or program, due to certain
typical obstacles and barriers63 (see Figure 12-2 for examples on an specific situation).
Barrier

Obstacle

Political

Lack of political motivation to support the market initiatives

needed for the development of renewable

Legislative

Lack of appropriate legal framework and legislation at regional

and national levels that support the programs

Financial

Lack of appropriate financing for long-term financial benefits

Fiscal

Renewable energy technologies suffer from distorted

competition from conventional energy sources (e.g. coal,
nuclear) in terms of final end-user prices

Administrative

Lack of practical support at the regional and local level to

stimulate development of renewable energy projects

Technological

63

Technological obstacles related to research, development and

The obstacles for the deployment of sustainable projects in developing countries include lack of
client creditworthiness and currency risk (IR49), but also corruption, poor education of the
decision makers and over-pollicisation; among other structural issues.

109

demonstration
Information,

Lack of awareness of the potential and possibilities for

education and

renewable

training
Figure 12-2: Examples of barriers and obstacles to the deployment of renewable energy
programs
Source: IR50

Given the former, a RMFM should be proposed and sold once understood by the
consultancy the actual interests and drivers of the regions decision makers. For instance, if
economic incentives are particularly important in a certain region, the economic benefits
should me made clearly visible, while addressing the superior goal of building regional
sustainability (social and environmental bonuses).
A framework to approach RMFM initiatives should consider this kind of details, but also
technical, scientific, research, policy and other success factors.
The goal of a RMFM initiative is basically to contribute to the regions sustainable
development, which can take the form of community building, closed substance loops,
optimisation and rationalisation of energy and materials; creation, utilisation, reutilisation
and disposal of products; and ultimately, construction of a Circular Economy.
The most visible elements of a RMFM initiative are those related to optimising energy,
water, wastewater and solid waste systems; along with those aimed to enhance the
cooperation and interplay among industrial players, in terms of energy and materials.
Nevertheless, MFM can span a wider range of activities, systems and projects, both at the
household and company, inter-company, local and regional levels. For instance, combined
sustainable in-house energy generation projects could turn an oil-dependent village or
neighbourhood into an energy producer for the surrounding region; or the optimisation of
the main industrial facility in a locality can positively impact the locality in terms of
employment and investment.
The decision for a region to engage in a program of activities, or develop a master plan for
sustainability is usually taken by the politically and economically relevant stakeholders,

110

therefore their opinions and needs shall be taken into great account when crafting and
proposing MFM projects and master plans.
This section suggests a framework to develop a RMFM initiative, with the ultimate goal of
attaining for the target system (region) a Circular Economy64 concept, while contributing to
the regional sustainable community development65.
The main aspects of implementation to be addressed are: how to turn ideas into attainable
projects and what indicators are to be developed in order to rank projects and measure
their contribution to the regions development (added value). A fundamental prerequisite
for a RMFM initiative is to have a contact from an interest group with influence and power
in the region requesting the MFM analysis.
A suggested approach for regional MFM could be as follows:
1. Preliminary analysis of the region: historical and development drivers, stakeholders,
economic drivers and institutions, pressing problems, urban systems (water,
wastewater, energy, waste), materials and energy flows.
2. Kick-off meeting(s) with pre-defined stakeholders, to understand their opinion on
the

current

status

of

the

region

(system)

and

their

development

intentions/plans/needs. Stakeholder analysis is to be performed along the whole

process, especially during the two first steps. Settle a MFM board of trustees, with
power to make decisions.
3. Information, motivation, training of decision makers and key actors in the system,
towards the ideal (vision) of a Circular Economy.

64

65

Circular Economy refers to the redefinition of a regional economy to the nature-based paradigm
in which waste does not exist, but all outcomes from a process feed other processes, and both
resource utilisation and load on natural sinks are reduced. A fundamental issue in circular
economy is the energy issue, which should be based on renewable sources to the largest extent
possible (Heck, 2006). This paper uses the term Circular Economy rather than Zero Emissions,
because of the former being more visionary and long-term aimed (and including legal and other
regulatory aspects). We daresay the Zero Emissions concept is a sub-set or pre-requisite of
Circular Economy.
A system of activities and economic approaches aimed to enhance the well-being of the local
community in a sustainable (economic, environmental and socially sound) way (own definition,
based on several sources).

111

4. Material Flow Analysis (MFA) of the system, previous definition of the system
boundaries66. MFA should focus on the urban systems, main economic drivers, and
explore possibilities for interplay and circular material and energy flows, as well as
in the energetic and material utilisation of wastes. Main goal: to understand and
describe the system (especially its real operation costs), for which IT and
diagramming tools are to be used (Sankey and block diagrams, modelling tools, the
umberto MFA package, etc.) Network analysis should identify the current interplay
relations and potentials.
5. Define concrete optimisation potentials and craft sustainable ideas towards it.
Consider financing mechanisms (i.e. carbon trading, government invest, contracting
mechanisms). Perhaps apply a participatory approach with the MFM board in order
to define concrete projects. Depending on the motivations of the political and
economically relevant stakeholders, emphasise certain aspects of the project, such
as, for instance, contribution to the communitys well-being.
6. Craft a Master plan, stating the optimisation/development vision for the system
and both the strategy (programs) and tactics (concrete projects, featuring financial
aspects and project management) to achieve it. Such plan should be in line with the
National Energy Strategy guidelines and priorities (to boost economic and technical
national support).
7. Founding an MFM firm (public or public-private partnership) to deal with the
projects implementation, involving the MFM-Team and the MFM board.

66

Boundaries can be set in a vertical or horizontal fashion: Vertical means to focus on a particular
material flow, even beyond regional limits (in case interdependences with other flows are
neglectable), while horizontal refers to a geographically bound master plan (P. Rosenthal, 2008,
personal communication).

112

12.7. A timeline for renewable energies development under the

NES
Based on A. Avad, 02.2009, A Framework for
the creation of a National Energy Strategy in
Ecuador, Renewable Energies, IMAT, IfaS.
As mentioned, the long-termed countrys objectives include increasing the electricity
generation from 46,6 % hydropower to 80 %, plus a 10 % share of renewable energy. Under
the NES it would be possible to reach a permanent 100 % renewable threshold, even taking
into account the annual growth in electric demand. The main starting indicators are as
follows, in the period January-July 2008 (CONELEC, 2008):

Installed capacity: nominal 4 946,46 MW, effective 4 401,14 MW

o

Hydropower capacity: 2 030,68 MW (46,6 % of the effective capacity)

Gross generation: 9 436,20 GWh

o

Hydropower 5 874,71 GWh (62,26 %)

Wind + solar (Galapagos) 0,8 GWh

Thermal generation 3 423,02 GWh

Energy generated for public consumption and available in distribution

systems, excluding two special consumers, energy exports and transmission
losses (net generation): 7 488,49 GWh

Energy losses in distribution: 1 484,99 GWh (19,83 %)

Total energy given to final consumers (total electric demand): 6 003,50 GWh

Demand growth: 5,9 % per year (CONELEC, 2008) to 7 % per year (Huiskamp, 2007)

Starting from that scenario, and adopting a time-frame until year 2020, a positive
renewable-based development could take place if starting with the definition of a NES,
avoiding capacity increase for non-renewables and supporting capacity building for
renewable (also abolishing installed capacity limits for renewable energies to receive
preferential tariffs and being purchased).
Economic aspects (i.e. investment costs) have not been taken into account, but the state
indeed will have to address anyway the 5,9 % annual growth in electricity demand. Such
growth could be addressed by the historically usual means, equally expensive and non
sustainable: energy purchases from Colombia and expansion of the thermal generation

113

capacity, but this approach offers a better way, more tuned with the current Ecuadorian
governments goals.
Notes:

Conventional thermal generation is the main source to be replaced by renewables.

Nevertheless, it is necessary to keep the existing capacity to work as a buffer during
the transition to an ideal 100 % renewable energy state.

During the execution of this strategy, excess thermal generation (excluding

thermogas) may occur, and could be exported to Colombia.

Thermogas generation is considered as renewable if fuelled with the associated

natural gas from the oil industry, which is currently flared.

Distribution losses are expected to be reduced by 0,3 % per year.

Geothermal yield was taken from US-based projects.

Thermogas yield was taken from the Machala Power state of the art generation
facility.

Solar thermal yield was taken from the Andasol 1 project in Spain, due to
equivalent climatic conditions.

Hydropower, photovoltaics and windpower yields were calculated out of data from
existing facilities in Ecuador.

114

Base data for calculations:

Thermogas yield

Wind yield

gas TOE

101789.00

Mwe

2.42

GWh

392.70

GWh

1.60

Mwe

130.00

GWh/Mwe

TOE/GWh

259.20

GWh/Mwe

331.04

Solar thermal

Hydro yield
Mwe

2030.68

GWh

11749.42

GWh/Mwe

172.83

0.02

GWh

0.02

GWh/Mwe

Mwe

50.00

GWh

157.40

GWh/Mwe

317.66

Geothermal yield

PV yield
Mwe

1512.50

Mwe

2500.00

GWh

15000.00

GWh/Mwe

166.67

952.38

Outputs of the suggested strategy by 2020:

Contribution to the energy mix (after losses)
80.79%

Hydropower

0.82%

Wind power

0.13%

PV

4.09%

Thermogas

4.95%

Geothermal

0.65%

Solar thermal

115

Conventional

Installed

Demand

thermal

Excess

Renewable

GWh

(minus

GWh

sources

Period

Generation
Generation

capacity

minus

MW

losses) GWh

hydro

losses

2738.4

1435.48

4699.77 From the baseline until 2014 electricity demand is

2030.68

5874.71

wind

2.40

0.79

0.78 expected to rise 5,9 % per year

solar

0.02

0.01

0.01

S1 2008
6003.5

Initiatives

GWh

(baseline)
7439.0

2738.4

4700.56
hydro

2009 2010

12715.4

13849.3

4381.5

1133.85

2030.68

11749.42

wind

50.40

33.32

solar

0.02

0.02

4381.5

13465.6

4381.5

32.99 body, awareness and education campaigns. Additional

0.02

50 MW of windpower are developed

9467.79
hydro

2010 2011

9434.78 Creation of the National Energy Strategy: main legal

429.26

9470.03 Further development of the National Energy Strategy

2030.68

11749.42

wind

50.40

33.32

32.99 tools: technical norms, energy policies, revised subsidy

PV

10.00

10.50

10.40

policies, incentives for renewables, etc. Additional 10

13894.9

4381.5

9513.42
hydro

2011 2012

14260.1

4381.5

MW of photovoltaics are developed

1095.83

10931.07 Additional 15 % oh hydropower developed

2335.28

13511.83

wind

50.40

33.32

32.99

PV

10.00

10.50

10.40

116

Conventional

Installed

Demand

thermal

Excess

Renewable

GWh

(minus

GWh

sources

Period

capacity

15355.9

4381.5

10974.46

2013 2014

15992.4

13511.83

wind

50.40

33.32

32.99 fed with 102000 TOE of natural gas from the oil

PV

10.00

10.50

10.40 industry (otherwise flared, thus it is considered as

130.00

392.70

599.99

4381.5

4381.5

17111.9

14187.42

wind

100.40

66.38

65.72 Additional 5 % of hydropower developed, microhydro.

30.00

31.50

31.19

130.00

392.70

319.66

354.16

14488.91 Additional 25 % of hydropower developed. Starting this

hydro

3065.06

17734.28

Wind

100.40

66.38

65.72 period, electricity demand is expected to rise 7 % per

30.00

31.50

31.19

130.00

392.70

320.84

2176.22
thermogas

4381.5

Additional 20 MW of photovoltaics are developed

11965.12

PV

19288.1

11548.56 Additional 50 MW of windpower are developed.

2452.05

4381.5

4381.5

renewable)

hydro

thermogas

2014 2015

318.48
11319.96

PV

16346.6

10958.10 Additional 130 MW of thermogas power are installed,

2335.28

thermogas
15701.4

Initiatives

losses

4381.5
hydro

15101.4

minus
GWh

MW

losses) GWh

2012 2013

Generation
Generation

year.

14906.64

117

Conventional

Installed

Demand

thermal

Excess

Renewable

GWh

(minus

GWh

sources

Period

capacity

18309.7

4381.5

19591.4

21076.6

2017 2018

20962.8

losses
17734.28

wind

100.40

66.38

65.72 fed with 102000 TOE of natural gas from the oil

30.00

31.50

31.19 industry (otherwise flared, thus it is considered as

260.00

785.40

1354.78

4381.5

4381.5

644.03

renewable)

15283.04

1485.15

15325.08 A 100 MW geothermal project is undertaken.

hydro

3218.31

18620.99

wind

150.40

99.44

98.44 Additional 50 MW of windpower are developed.

30.00

31.50

31.19

thermogas

260.00

785.40

646.38

geothermal

100.00

600.00

594.00

PV

4381.5

4381.5

14542.11 Additional 130 MW of thermogas power are installed,

3065.06

thermogas

2016 2017

Initiatives

hydro

PV

19664.5

minus
GWh

MW

losses) GWh

2015 2016

Generation
Generation

Additional 5 % of hydropower developed, microhydro

16695.09

4049.93

19226.18 Additional 25 % of hydropower developed. Additional

hydro

4022.89

23276.24

wind

200.40

132.50

30.00

31.50

31.19

thermogas

260.00

785.40

648.74

geothermal

100.00

600.00

594.00

PV

131.17 50 MW of windpower are developed

118

Conventional

Installed

Demand

thermal

Excess

Renewable

GWh

(minus

GWh

sources

Period

capacity

25012.7

22430.2

25744.4

4381.5

24000.3

20631.27

3314.18

19296.01 Additional 100 MW of windpower are developed.

hydro

4022.89

23276.24

wind

300.40

198.61

30.00

31.50

31.19

thermogas

260.00

785.40

651.10

geothermal

200.00

1200.00

1188.00

PV

4381.5

4381.5

Initiatives

losses

4381.5

196.63 Another 100 MW geothermal project is undertaken

21362.91
19389.11 Additional 130 MW of thermogas power are installed,

hydro

4022.89

23276.24

wind

300.40

198.61

30.00

31.50

thermogas

390.00

1178.10

981.36

geothermal

200.00

1200.00

1188.00

50

157.40

155.826

PV
2019 2020

minus
GWh

MW

losses) GWh

2018 2019

Generation
Generation

196.63 fed with 102000 TOE of natural gas from the oil
31.19 industry (otherwise flared, thus it is considered as

2323.25

renewable). First solar thermal project in Ecuador is

undertaken

solar thermal
26323.6

4381.5

21942.10

119

12.8. Case Study: Suggested approach for waste management in

Guayaquil
Based on A. Avad, and R. Hollinger, 02.2009,
Suggestions for a National Waste Strategy in
Ecuador, Sustainable Waste Management,
IMAT, IfaS.
In this case study the present waste management situation for Guayaquil will be described
and an improved system will be designed. The chapter will show how the waste
management situation can be changed towards more sustainability as described in the
strategy part of the paper.

12.8.1. General information

The city is located at the gulf of Guayaquil in the enclosed basin, where the Ro Guayas is
emptying into the Pacific Ocean. The area of the city is mainly flat. The city is located in the
Ecuadorian province of Guayas.
The soil is very vital in the region of Guayaquil. This enables a rich and divers agricultural
production. Cotton, oil plants, sugar cane, rice, banana, cacao, I as well as tropical fruits like
mango, papaya are only some examples of the divers agricultural production in the region.
Furthermore, the geographical location of Guayaquil at the Gulf of Guayaquil enables to
grow shrimps and catch fishes in a significant amount.

Figure 12-3: Location of Guayaquil: satellite picture (left) and map (right)
Source: (IR38)

Guayaquil is, with about 2 366 902 inhabitants, the biggest city in Ecuador. The city also is
the industrial centre of Ecuador. The city is on sea altitude and has the most important

120

harbour, where 50 % of all exports and 80 % of all imports are transacted. It is furthermore
with 316,42 km land mass the city with the highest density in population (7 480
persons/km). The city is separated in 73 sectors which are consolidated into 16 municipal
communities.

12.8.2. Landfill
The landfill of Guayaquil Las Iguanas opened in 1994 (simultaneous to the closing of the
dump San Eduardo) and was one of the first sanitary landfills in Ecuador (IR39). It is located
about 18 km north of the city centre (2 454.91S / 795733.19W) and with an altitude of
78 m about 70 meters higher than the city centre. The area of the landfill is about 190 ha
and is surrounded by vegetation. The housing starts after a 2 km long asphalted road. It is
planned to convert the landfill into a park as soon as the landfills capacity is reached.
The landfill is owned by the municipality of Guayaquil and run by the consortium ILM, a
private organization. Every seven years the contract for operating the landfill is expiring.
The city of Guayaquil can than make an open bidding for the next contract.
Since 1994 about 8 million tons of waster was disposed at the landfill (IR40). The landfill is
expected to reach its capacity in 2020 (IR39). In the year 2007 about 90 % of the municipal
waste of Guayaquil, about 850 000 t of waste were disposed at the landfill (IR40). This is
equal to 0,98 kg per inhabitant per day. The amount of waste is expected to increase by an
average of 2,4 % per annum (IR39). Figure 12-4: Waste expectation at the landfill (19952020) shows the development of the amount of waste, which is expected to be delivered at
the landfill.

Figure 12-4: Waste expectation at the landfill (1995-2020)

Source: Self elaboration based on data from (IR39)

121

The increase is based on a growing population (2,5 % per year) and increasing waste
production per capita e.g. the waste production per capita in Munich (Germany) is with
1,39 kg/a about 42 % higher (IR41). The landfill is separated in four sectors (A, B, C and
D). Sector B is used for inert waste (e.g. construction waste) only. Sector D is the last sector.
It started to receive waste in October 2006 and is the only active one nowadays.
About 91 % of the waste is coming from households the remaining part is inert municipal
waste. The overall composition of the waste at the landfill Las Iguanas (see Figure 12-5) is
consistent with the nationwide numbers mentioned in chapter 10.2. Since there is
weighting installed at the entry of the landfill, the amount of waste is reasonable accurate.

Waste Composition - "Las Iguanas"

2%
3%

2%

1%

2%
organic waste

3%

paper

4%

plastics
cardboard

5%

glas
9%

textile
58%
11%

wood
greenery
metal
leather & rubber

Figure 12-5: Waste Composition at the Las Iguanas landfill of Guayaquil

Source: (IR42)

The landfill has no recycling of the waste and there are no legal and neither illegal people
on the landfill to pick out valuable materials, like it is common in most developing countries
landfills. This means all recycling activity, which is done happens beforehand the waste
reaches the landfill.
As mentioned above every truck is weighted when it arrives and when it leaves the landfill
to measure the amount of delivered waste. The waste is brought to the sector where it
belongs and is compacted there to up to 1 t/m. The landfill doesnt use artificial
membrane, since the ground consists of a about 10 m thick layer of a very cohesive clay.
Complying with Ecuadorian law, the very low coefficient of hydraulic conductivity
(10-7 cm/sec) of the clay allows the operation of the landfill without membrane.

122

Cover
To avoid smell, pests and vermin, the waste layer is covered every day with the clay and soil
of the spoil. The clay layer is about 60 cm thick. The soli clay mixture is quiet dusty until it
got wet, than it is getting compacted and less permeable. The clay cover is thick enough to
withstand the load of the machines. Once an area is closed finally, a loose soil cover is put
above the clay to allow vegetation to grow.
Leachate
Leachate is a highly contaminated liquid with a low concentration of dissolved oxygen. The
leachate is caused not only by biodegrading of organic waste but also by rain, which is
washing out and dissolve the non organic waste.
The landfill of Guayaquil is the only landfill in Ecuador that has a leachate treatment (WHO,
2002). Nevertheless, the operator of the landfill is still looking for improvements, since the
situation is not satisfying (UK Opportunities, 2008).
The waste composition of MSW with a high share of organic and moisture causes a leachate
generation immediately after the disposal. Therefore, the cover is put on the waste directly
after the compaction. Leachate has to be collected and treated to avoid contamination of
the ground water: in every layer of clay, at the bottom of each waste layer (every 5 m),
there are horizontal drainage pipes covered with rough stones (see Figure 12-6).

Figure 12-6: Filter and pipe system for drainage

Source: (IR42)

The drainage system collects the leachate and is connected to seven storage ponds in site;
where in the rain season the rain water is collected and in dry season it is evaporated

123

yearly evaporation potential is 1 600 mm in Guayaquil (IR42). The site reported an

average production of 238 m3 per day 2006 for Sector A and Sector C combined. With the
addition of Sector D, this estimate has increased approximately 454 m3 per day in 2007
(IR39).
A methane gas measurement on side showed that despite the drainage system, the moister
content in the waste cells are on a high level. This level of leachate within the cells lowers
the landfills biogas yield. The moister content in the cells could be reduced by installing
pumps at the drainage system (IR40).
Gas
By the biodegradation of the organic material in the waste under the partly anaerobic
conditions in the site biogas is produces. This biogas leaves the landfill body by vents, which
are equipped with a burner that is ignited manual (IR39).
As shown in Figure 12-7, for each vent, a 100 cm diameter hole with the depth of 180 cm is
excavated, whereby the first 60 cm are clay and the rest waste.

Figure 12-7: Gas flaring facility at the landfill of Guayaquil

Source: (IR42)

124

This excavations sidewall is covered with a wire netting. Than the hole is, like the drainage,
filled with rough stones and a PVC pipe with holes. The hole is sealed on the surface, so that
the gas has to leave through the pipe. The burner is about one meter above the surface.
The gas, which is leaving the landfill, has methane content between 58 and 47 % (IR39) and
is therefore inflammable (IR42).

12.8.3. Waste collection

In the 1980s Guayaquil produced about 1 200 tons of garbage daily. There was a collection
rate of 38 %, which was brought to a dumpsite. The remaining part 744 tons a day were
deposited in abandoned fields, creeks, estuaries, rivers, or incinerated in the open (WHO,
2002).
Following a collapse of the solid waste collection system and riots caused by the
environmental and social problems in the 1980s, the city was divided into 2 separately
administrated districts, in which the waste collection were done by 2 private companies.
The payment for the private companies was a fixed monthly payment for operating in a
specific area. In 1994 a new recruitment period started and the municipality established a
new financial system. From 1994 on the private companies were paid per ton that has been
put on the landfill. A partnership of local investors and a Canadian Firm Consorcio
Vachagnon got the contract to cover both areas. They offered with 9 US$ per ton the
lowest price of all competitors (WHO, 2002).
The way the company was paid was the reason of an issue, which was not expected by the
municipality. The company, which got paid per ton of waste that was brought to the
landfill, just collected waste not only from private households but also from supermarkets
and industry (without charging the industry). This waste was much cheaper to transport to
the landfill, since it was less distributed in city. The effect was that the estimated amount of
waste per day was surmounted by 33 %. Instead of 1 200 tons per day the amount of
waste, which arrived at the landfill was 1 600 t/d. The city of Guayaquil nevertheless earned
enough to cover the costs of the collection. The population of Guayaquil is paying 12,5 %
surcharge on their electricity bill if there consumption is higher than 300 kWh and 4,5 %
below the 300 kWh to cover the waste treatment costs (WHO, 2002).
The Consorcio Vachgon has the contract to collect the waste in the city. Therefore they
have a fleet of: 52 rear loaders, 9 tank trucks, 2 tankers, and 2 trucks with shovels (IR43).

125

They are responsible for the whole city (see Figure 12-8). The city stuff is constantly
monitoring the collection. The quality of service seems to be adequate. Nevertheless, there
are lacks in the marginal neighbourhood. This lack in quality could also be caused by the
comparable low price (9 US$/t), the company gets for the collection.

Figure 12-8: Catchment area of the landfill

Source: Self elaboration based on Google-Earth and (IR44)

12.8.4. Waste separation and recycling

There is no waste separation installed in Guayaquil. Like in the other bigger cities of
Ecuador a large number of people earn their money by collecting valuable waste, the so
called waste pickers. The city of Guayaquil estimated that about 1 500 informal persons are
recycling waste in the streets. This collected valuable waste is brought to different sites of
REIPA. Often there are middlemen in-between who make their earnings by trading the
waste between the waste pickers and REIPA. The company REIPA (Recyclers and
Environmental Protectors) is buying valuable materials from companies and the kerbside
pickers. Therefore, they employ about 60 people constantly and 100 on demand. Figure
12-9 shows the price that is paid to the waste pickers, middlemen and companies to deliver
the valuable waste to REIPA (WHO, 2002).
Material

US $

Unit

Clean and thin plastic

0,12 Kg

Plastic bottles

0,10 Kg

Plastic packages or flip-flops

0,20 Kg

Average

0,14 Kg

126

White glass

0,02 Kg

Braun glass

0,02 Kg

Average

0,02 Kg

White paper

0,20 Kg

Printed paper

0,14 Kg

Coloured paper

0,10 Kg

Carton

0,06 Kg

Newspaper

0,08 Kg

Average

0,12 Kg

Aluminium tins

0,10 Kg

Aluminium pots (thick)

0,12 Kg

Lithographic sheets

0,11 Kg

Profile aluminium

0,12 Kg

Average

0,11 Kg

Scrap metal

0,01 Kg

Cupper

0,22 Kg

Bronze

0,15 Kg

Figure 12-9: Purchase prices paid for materials REIPA

Source: (IPEC, 2003, p.30)

The company sells about 1 200 tons of plastic in form of polyethylene pipes (being the
value for waste collectors: 168 000 US $ (see Figure 12-9)) and 48 000 tons of paper and
glass (value for the waste collectors between 960 000 (0,02 US $/kg) and 5 760 000 (0,12 US
$/kg) US $) a year.
Before the landfill Las Iguanas opened in 1994, many waste pickers, where living on the old
landfill. At Las Iguanas the area is protected by fences and it is prohibited to enter it. This
resulted a moving of the waste pickers into the city. Nevertheless, they are still starving
poor. This is caused as well by the lack in organisation. Different to for instance the capital
Quito, there is no institution for an organisation of the kerbside pickers (IPEC, 2003).

12.8.5. Special wastes

Special waste like hospital waste, batteries and contaminated industrial waste is nowadays
not collected separately, but deposed on the landfill, together with the normal municipal
waste. As mentioned in chapter 12.8.3 this is also caused by the collection company
Vachagnon, which is convincing industrial facilities to not treat their waste anymore but use
the free service of Las Iguanas to optimize their profit.

127

An article in the newspaper El Universo from February 2008 states that the municipality is
planning to operate a facility for the treatment of El Gran Guayaquil waste at the landfill Las
Iguanas from June 2008 on. In this facility, which will be run by the Municipal Public
Sanitation, the hospital waste will be disinfected (IR45). Once the hospital waste reaches
the landfill it will be treated by the processing machine ECODAS T2000. It shredders the
hospital waste and disinfects it by direct pressurized heated steam (138 C/3.8 bar) (IR46).
Afterwards, it is disposed in the landfill together with the municipal waste. It has a capacity
of about 2 tons in 8 hours of daily work. Since the expected infectious waste amount
exceeds the capacity in 2008, the planning includes building a second facility in 2008 (IR45).

12.8.6. Improvement potential for the waste management in Guayaquil

The waste situation in Guayaquil is compared with other cities in the area already quiet
improved. Nevertheless, it is lacking in several points. There is no official recycling or
separation of valuable waste. The informal recycling lacks in organization and facilities. The
landfill has no equipment to properly treat the leachate, to use the methane gas
energetically and to separate any valuable waste on the site.
Therefore a strategy has to be developed to improve the waste management system
constantly. It is suggested to develop an improvement strategy. The steps of improvement
include organization of the informal waste pickers in the city, a separated waste collecting
system in cooperation with the organized waste pickers, an installation of a separation of
the organic fraction at the landfill combined with a fermentation process. The steps would
constantly decrease the share of waste, which is deposed in the landfill. An increase in
operational lifetime and a lower biological activity of the landfill would be the consequence.
Organisation of kerbside pickers
Consistently fight for better work environment so that the local government should
sensitise to and recognise your profession by offering you your rights was the advice from
a waste picker of the city Bogot to an Indian counterpart (IR47). This could also be stated
to the waste pickers of Guayaquil, who still lack in any organisational structure, which
causes dependence on middleman and makes them informal and thereby vulnerable. This
informal way of recycling hinders the men, woman and children, who work without a
minimum hygienic conditions to gain and professionally recognition.

128

The waste pickers, organised by a centralised institution, could increase their social,
economical and educational level. Therefore, they need a possibility to follow their business
in a formal and more sophisticated way.
It would be thus a god suggestion to build up a possibility for the inhabitants of Guayaquil
to put there valuable waste into special recycling containers. The citizens can deposit their
recyclables, previously segregated at home into these recycling bins, which are separately
transported to the landfill Las Iguanas, where the valuable waste is brought to a sorting
place. At this place, the waste from the recycling containers, which has a higher density of
valuable materials like PET, cardboards, glass etc. than the normal municipal waste, is
sorted manually by the waste pickers and sold to the recycling companies.
This legal employment would improve the waste separation rate and therefore the overall
gained value in Guayaquil. Avoid waste pickers to live and work in the streets, where they
bother citizens and impair the hygienic conditions. And at the same time significantly
improve the chances for this people to develop in social, economical and educational ways.
Based on the waste composition, amount and purchase price; the gained value is shown in
Figure 12-10.
Value
Unit
Year
2010
Total waste
942.410
t
Area coverage
15%
Acceptance
8%
Waste amount effected 11.309
t
Share
Amount [t]
Value [US$]
paper
11%
1.244
161.718
cardboard
5%
565
33.927
plastics
9%
1.018
142.492
glas
4%
452
8.595
metal
2%
226
27.053
Sum
31%
3.506
$
373.785

Value
2011
975.395
30%
15%
43.893
Amount [t]
4.828
2.195
3.950
1.756
878
13.607

Unit
t

t
Value [US$]
627.667
131.678
553.049
33.359
105.001
$ 1.450.753

Value
2012
1.009.533
50%
20%
100.953
Amount [t]
11.105
5.048
9.086
4.038
2.019
31.296

Unit
t

t
Value [US$]
1.443.633
302.860
1.272.012
76.725
241.501
$ 3.336.731

Figure 12-10: Recycling rate and value for waste picker organisation
Source: Self elaboration based on data from Figure 12-4, Figure 12-5, Figure 12-9

The first scenario assumes the installation of recycling containers in 15 % of the area of
Guayaquil, the second 30 % and the last 50 % whereby the acceptance/usage of the bins
increases over time (both figures are assumptions). The growth of the area, where the
recycling containers are put, should start in the areas with the highest waste occurrence

129

density and grow from there organically. In this way the system gains the maximum
amount of recyclable waste per investment and allows the citizens as well as the waste
pickers to adopt.
To work together on an organisational level is an important step towards more power and
political influence. Both the municipality as well as the waste pickers would have a benefit,
if they cooperate and work hand in hand. Therefore, it is suggested to promote institutional
development in the direction of a waste pickers union.
Recycling Centre Las Iguanas
The next step of the waste management strategy is the implementation of a recycling
centre at the municipal landfill Las Iguanas (see Figure 12-11). This enables a further
reduction of the volume that has to be landfilled by installing one more recycling step for
valuable waste and separation of organic waste.

Figure 12-11: Flowchart of the Recycling Centre Las Iguanas

Source: Self elaboration

After the mixed sustainable waste is delivered in a hall of acceptance a wheel loader puts it
onto a belt conveyer, which transports the waste, after it is straighten out, over a disc
sequencer. At the disc sequencer the organic waste is separated with an assumed
separation rate of 85 % (sieve fraction <50 mm). The waste that is not sieved out has now a
much higher density of valuable waste. Therefore it is separated in the manual sorting step
together with the waste from the separate collecting manually.

130

If the mechanical separation and the fermentation unit starts to work in 2012 it would
result in a 64 % reduction of landfilled mass; compared with the situation without any
separation (see Figure 12-12). As Figure 12-12 shows the possible earnings of the
separation is ca. 16,4 million US$. The figures are based on the published value for the
recycled materials paid by the recycling company REIPA. The values have to be seen
theoretical since a huge amount of additional recycling material would influence the market
prices significantly.
2012
organic waste
paper
plastics
cardboard
glas
textile
wood
greenery
metal
leather & rubber
others
Sum

Total amount [t]

585.529
111.049
90.858
50.477
40.381
30.286
30.286
20.191
20.191
10.095
20.191
1.009.533

Recycling bins [t]

16.657
13.629
7.572
6.057
3.029
46.943

Value [$]
2.165.449
1.908.018
454.290
115.087

362.252

5.005.096

Share Mechanical [t]

0%
497.700
15%
33.037
15%
30.892
15%
15.017
15%
6.865
0%
0%
0%
15%
14.588
0%
0%
5%
598.098

Value [$]
4.294.807
4.324.841
901.009
130.432

1.744.847

11.395.936

Share
85%
35%
40%
35%
20%
0%
0%
0%
85%
0%
0%
59%

Total [t]
497.700
49.694
44.520
22.588
12.922
17.616
645.041

Value [$]
6.460.257
6.232.859
1.355.299
245.519
2.107.099
16.401.032

Figure 12-12: Earnings and Mass flows from the combined project in 2012
Source: Self elaboration based on data from Figure 12-4, Figure 12-5, Figure 12-9 and Figure 12-10

A biogas plant, which uses about 60 % of the separated organic waste, would produce
about 59 GWhel and 67 GWhth. Taken the feed in law of Ecuador into account, the income
by feeding in the electricity of these biogas powered CHP for instance 3 CHP with a
capacity of 2 425 MW (see IR 48) would be about 5,3 million US$. The thermal energy
could be sold to the nearby industrial area by connecting it via a district heating grid or
used on side for leachate evaporation. The digested residue can be used for the greening of
the closed parts of the landfill. If a separate collecting of organic material would be enabled,
one fermenter could be run with clean organic; this would result in an additional earning
through selling of the digestate as high quality soil enhancer.
The fermentations unit for the organic fraction would be quiet unique in Latin America. An
alternative to the high investment and capacity building requirements of a biogas plant
could be a composting unit, which provides the soil for the greening of the closed landfilled
parts. Nevertheless, it has to be considered, that a composting process is consuming energy
while a biogas plants produces electricity, thermal energy and (high quality) soil enhancer.
Furthermore, a biogas plant can get a bigger amount of CDM certificates and has higher

131

Share
85%
50%
55%
50%
35%
0%
0%
0%
100%
0%
0%
64%

chances to get incentives. Therefore the biogas technology is the better alternative and can
be, on the long run, the more economic alternative.
Theoretical Potential
Biogaspotential of organic waste
Organic waste used in the fermenter 60% of sperated
Biogaspotential of 60% of seperated organic
CH4 in Biogas
Calorific Value
Energy-Potential
Energy production by a CHP
CHP Power
Electrical efficiency of the CHP
Thermal efficiency of the CHP
Percent of CHP operation
Electricity production
Thermal energy production
Price for electricity from renewables (ec. feed in law)
Income by selling electricty
Digestate
Density of Biogas
Digestate

100
298.620
29.861.998
55%
10
164.241

m/t
t/a
m/a

7,44
39,7%
45,0%
90%
58.683
66.518
90,4
5.304.971

MW

kWh/mCH4
MWh/a

MWhel/a
MWhth/a
US$/MWh
US$

1,2 kg/m
262.786 t/a

Figure 12-13: Fermentation of 60% of the organic fraction of the Mechanical Separation
Source: Self elaboration

132

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