Ecuador’s government has ordered significant reductions in electricity use for industrial companies as the country faces its worst drought in more than 60 years. The energy crisis has sparked a strong reaction from businesses, which claim the measures were implemented without consultation and will cause huge financial losses.
A government document revealed that certain industries must reduce their electricity consumption by 50% during daylight hours. If the drought persists, businesses could be forced to stop their reliance on the national grid altogether. The power outages are intended to relieve pressure on a critical reservoir in southern Ecuador, which plays a key role in maintaining the country’s hydroelectric power supply.
The effects of the power outages are already being felt. More than 200 companies in Cuenca and Ambato, including German tire maker Continental AG, have experienced sudden blackouts. Continental reported that its plant in Cuenca was paralyzed without prior notice, causing production stoppages and subsequent losses. Ecuador’s shrimp industry, one of the world’s leaders, is also at risk, with experts predicting a possible loss of $75 million in monthly exports.
Business leaders have expressed frustration at the lack of consultation, with María Paz Jervis, president of Ecuador’s Business Committee, calling the government’s actions “unviable” and “disproportionate.” The group is seeking an emergency meeting with President Daniel Noboa to negotiate a coordinated response to the crisis.
The power outages, coupled with recent economic contractions, represent a significant challenge to Ecuador’s economy, which relies heavily on hydropower for approximately 70% of its energy needs.
