Decree 32: what mandatory self-generation asks of high-voltage industry

President Daniel Noboa signed Executive Decree 32 in Guayaquil on June 15, 2025. It amended the general regulation of the Organic Law on the Public Electricity Service (LOSPEE) and added an article 10.1 that reads: “High-voltage tariff customers must have generation systems to supply their own demand.” Only by exception could they deliver surpluses to the national grid. A transitory provision, the fourteenth, gave them 18 months to comply (Decree 32).

Executive Decree 515, published on September 30, 2026, rewrote that part of the article (Registro Oficial 380). Under the new text, CENACE, the grid operator, may order high-voltage consumers “with demand above that defined” in the regulation off the grid during a deficit or rationing, and also for grid problems such as overloading, low voltage, maintenance or contingencies. “In these periods,” it adds, those users “must have generation systems to supply the totality of their energy and power demand,” under rules to be issued by ARCONEL, the regulator.

The same article lets ARCONEL issue exceptional rules so that regulated and unregulated users can run emergency generation, “their own or third parties’,” rented or contracted. The rewritten transitory provision keeps the 18 months, counted from Decree 32’s entry into force, and exempts consumers who, under the tariff schedule, use electricity for social assistance, public benefit, drinking-water service or official entities. It puts ARCONEL in charge of follow-up and control. And it provides that when CENACE’s studies show that additional generation must be brought in, contracted or dispatched, ARCONEL will apply “the corresponding regulatory, economic and tariff mechanisms” to recover those costs, once the ministry so orders (Registro Oficial 380; Ministry of Environment and Energy).

Disconnection is already in use. From October 12, high- and medium-voltage industries had to stay off the grid for 72 hours a week (Vistazo), and from November 1 to 4 the AV1 industrial customers covered by the measure were held to grid supply “equivalent to zero megawatts” (Vistazo). Primicias described the week of November 6 as the one in which those disconnections were ending (Primicias); the sources reviewed for this article show no schedule after November 4.

Decree 32 took effect on its publication in Supplement 62 of the Registro Oficial, the official gazette, on June 18, 2025 (ARCONEL’s consolidated regulation). Eighteen months from that day end on December 18, 2026, and that is the date ARCONEL itself uses in its Regulation 004/25: until December 18, 2026, distributors must send CENACE monthly power and energy records for high-voltage users without their own generation (Registro Oficial, Second Supplement 158).

The government uses an earlier date. According to Expreso, official letter MAE-VEER-2026-0255-OF from the Vice-Ministry of Electricity, dated July 7, 2026, gave distributors 15 days to notify their high-voltage customers and remind them that the deadline would end on December 15. Within the same 15 days they were to deliver a register showing which companies already generate, which are installing systems and which are still planning, and to report progress every month from then on (Expreso). Energy Minister Juan Carlos Blum also puts the deadline at December 15 (Primicias).

Decree 515 did not move the deadline (Primicias), and according to Primicias the president has warned that he will not move it (Primicias). The earliest date in official statements is therefore December 15; the date that follows from the gazette is December 18.

The obligation falls on customers on high-voltage tariffs, which the tariff schedule splits into two groups. AV1 holds medium and large industries, such as cement makers and high-consumption manufacturers, most of them in industrial parks or zones such as Durán; Primicias counts 185 companies. AV2 holds the largest consumers, connected directly to the transmission grid, such as large mining projects and steelmakers (Primicias).

How many comply depends on whom you ask. Juan Carlos Navarro, president of the Guayaquil Chamber of Industries, said on September 24 that only 47 companies generated 100% of the electricity they use, and that they already did so before the decree (Primicias). President Noboa said on October 26 that 45% of industries had at least 30% self-generation (El Universo) and that the companies that neither installed self-generation nor cut their consumption in the hours requested accounted for about 300 MW of demand (Extra). On November 6, Noboa said that in October only 48% of companies covered 30% of their consumption with their own generation (El Universo).

Many companies have backup generator sets, which do not always cover their full demand. Under the previous emergency-genset regulation, distributors qualified 537 private sets with 482.9 MW, and another 301, with 163.9 MW, were in process, according to the 2025 accountability report of the Ministry of Environment and Energy (ministry report).

The rule that says what counts as compliance does not exist yet. Decree 515’s first transitory provision gives ARCONEL eight months from September 30, 2026 to issue “the technical and commercial rules” the decree requires, and provides that arrangements needing a specific rule apply from when that rule takes effect (Registro Oficial 380). Eight months run to the end of May 2027. On November 5, Minister Blum said ARCONEL will have to issue about 21 regulations to apply the reform (Primicias). The resolutions its board has published in 2026, 001/26 to 011/26, the last dated October 9, include none of them (ARCONEL).

Nor is it clear how much must be generated. The decree’s text speaks of “the totality” of energy and power demand during disconnection periods. President Noboa, by contrast, recalled on October 26 that in mid-2025 industries were given 18 months “to have up to 30% self-generation,” and said those that fall short had been cut off for 30% of the week’s hours (El Universo). Fernando Salinas, president of the Foro Energético Ecuador, noted that Decree 32 sets no minimum percentage, only the obligation to have systems able to supply a company’s own demand (Extra).

Neither Decree 32 nor Decree 515 sets penalties for failing to comply. On October 26 the president said of companies that had not complied, “we’ll see whether they are fined or not” (El Universo), and El Comercio reported that the government was weighing sanctions for those that did not disconnect when told to (El Comercio). According to El Universo, on November 6 Noboa warned that companies that had not complied would receive the corresponding fines; the paper reported no amounts and no rule that would support them (El Universo).

What the government has announced is a paid alternative. According to Minister Blum, from December 15 companies that fall short may use electricity from two rented barges, about 200 MW together and running since September 21, at a tariff he put on September 18 at between USD 0.24 and 0.44 per kWh (Primicias). From that date, he said, the barges will be “the way” AV1 and AV2 consumers stay connected (Primicias); their rental will be added to what industry pays, and companies that do not accept those terms will have to disconnect (El Comercio).

Since October, high-voltage industry has paid a temporary tariff. Resolution ARCONEL-009/2026 sets the charges for consumption in October, November and December 2026 (Registro Oficial 380). An AV1 industrial customer pays USD 0.3106 per kWh for energy on weekdays from 08:00 to 18:00, USD 0.3509 from 18:00 to 22:00 and USD 0.2747 from 22:00 to 08:00, plus a demand charge of USD 3.93 to 4.40 per kW a month, depending on the distributor.

ARCONEL puts the average price at 30 cents per kWh for the AV1 group and 29 for AV2 (ARCONEL). Before, according to the minister, high-voltage industry paid about 12 cents (El Comercio).

Every month ARCONEL publishes the rates at which it compensates each kWh produced by a qualified emergency generator set while CENACE has a deficit period active. They are calculated for a “standard generator” from its operation and maintenance, fuel and fuel-transport costs, and do not include buying the equipment (Registro Oficial, Fourth Supplement 342). They therefore serve as an official estimate of the variable cost of generating with each fuel, which can be set beside the grid tariff.

At these rates, generating with diesel costs more per kWh than grid energy in every band, even before counting the equipment, and LPG costs more except on weekdays from 18:00 to 22:00. Fuel oil costs less than the grid in every band, but needs engines built for that fuel.

The compensation has limits. It is paid only for energy produced while CENACE keeps a deficit period active; it requires sets of at least 100 kW, qualified by the distributor, with a sealed meter and unsubsidized industrial fuel; and regulated customers receive it as a credit on their bill. The scheme does not require owning the set: it also covers whoever rents it or has it under contract (Registro Oficial, Fourth Supplement 342). From October 12 to November 11, the terminal price at which EP Petroecuador sells industrial diesel 2 to fuel distributors is USD 4.72 a gallon, VAT included (EP Petroecuador). In 2025, CENACE recorded USD 1.75 million for consumers’ own-generation contribution, all of it between January and July (CENACE).

Buying generator sets is the best-known route, and it is not quick. At the Expo Energy Ecuador fair in September, one contractor put prime-power diesel engines of 2 to 3 MW at USD 500,000–600,000 per MW, and another supplier said importing a 1 MW unit alone takes four months and commissioning at least six. According to the first, hybrid systems combining thermal generation, panels and batteries usually take about eight months to install; 56 MW turbines take up to 36 months to be delivered (Primicias). At those lead times, new equipment ordered in November would not be running in December.

That is why third-party generation matters. The law published in the Fifth Supplement of Registro Oficial 234 on March 2, 2026 lets regulated and unregulated consumers install generation systems solely for their own supply, connected to the distribution or transmission grid, owned by themselves or by third parties, and contract third parties to finance, operate and maintain them (Registro Oficial 234). Under Decree 515, third-party-owned self-supply systems whose output goes solely to regulated or unregulated consumers “shall be considered providers of the public electricity service” (Registro Oficial 380).

Some companies already buy solar power generated far away. In Santa Elena, a 65 MWp plant running since September sells its output under 10-year contracts to commercial and industrial companies, which consume it remotely over CNEL’s grid; another, of 17 MWp, will let an industry in Durán cover 96% of its consumption through a netting arrangement between two CNEL units, according to the project’s resident engineer (Primicias). On November 5 a third plant, of 82 MWp, began operating, which the ministry presents as private supply for industry (Ministry of Environment and Energy). No rule yet says whether that supply, which arrives over the grid, counts toward the decree.

Panels at the plant itself cut fuel and bills, but they do not meet the obligation on their own. In late October, an engineer at a company that sells electrical equipment estimated that installing a megawatt of photovoltaic capacity costs about USD 400,000, against 700,000 two years earlier, and that generating with panels costs about USD 0.07 per kWh (Primicias). Under Decree 515, the distributor authorizes self-supply systems for regulated customers and ARCONEL those of large consumers. Those systems may inject energy into the distribution grid, and regulated customers who install them will pay charges for the use or availability of the grid, under the regulation ARCONEL issues (Registro Oficial 380). For regulated customers, Regulation ARCONEL-005/24 limits a system without injection to the maximum recorded demand and the approved connection capacity, with anti-injection protection; with injection, the grid’s capacity at the connection point sets the limit. Systems above 100 kW pay a one-time fee of USD 4 per kW for the procedures, capped at USD 10,000 for systems above 2 MW, and connection is free (ARCONEL). CNEL publishes the procedure for its service areas (CNEL EP).

A system that runs synchronized with the grid without injecting must meet the conditions the distributor sets to avoid injection or “a possible island operation,” and one that does not synchronize with the grid falls outside that regulation and is only registered with ARCONEL (ARCONEL). In practice, grid-tied inverters stop producing when the grid goes down: during a disconnection, panels contribute only if the plant runs as an island, with generator sets or batteries holding the voltage, and then they cut the fuel those sets burn during the day.

For groups of companies, the March law created Autonomous Energy Districts: legal entities that may own a network with their own generation, local or remote, to cover their power and energy demand, under a permit from the ministry (Registro Oficial 234). Decree 515 added the articles that regulate them (Registro Oficial 380). At the same fair, a former energy minister proposed that groups of 8 to 10 neighboring companies, with 80 to 100 MW of combined demand, form one; he estimated it would take at least 18 to 24 months and that its start depends on rules not yet in force (Primicias).

On October 5, José Julio Neira, secretary general of the Public Administration, announced that the government would remove VAT and the currency-outflow tax (ISD) on imports of equipment for private generation and storage projects, from October 6 (Teleamazonas); on the radio, according to El Universo, Neira spoke of imports “for private hydroelectric and energy-storage projects” (El Universo). A tax expert quoted by Primicias explained that taking VAT to 0% would require an executive decree (Primicias). On October 26, the president spoke of the removal of VAT on solar panels, generators and spare parts as done (El Universo), but the sources reviewed for this article show no decree or resolution putting it into effect by November 8, nor which equipment it covers.

According to Primicias, imports of generation equipment pay 15% VAT and 5% ISD (Primicias). According to El Universo, Navarro, of the Guayaquil Chamber of Industries, said that until then only solar projects were exempt from ISD, and that they bore 15% VAT that could not be recovered (El Universo). The Ecuadorian Association of Renewable Energy and Energy Efficiency also points to the double deduction in income tax for the depreciation and amortization of renewable generation equipment (Primicias).

Neira also said the procedures to self-generate had been cut from twelve months to three (Expreso). In remarks published by Expreso on October 12, Navarro warned that many Guayaquil industries lack the space and logistics to generate on their own premises, and that with permits, licenses and transmission connections the process can take more than a year (Expreso).

For credit, the public bank BanEcuador offers micro, small and medium-sized companies a line for generation and storage systems, renewable or fossil-fueled: up to USD 3 million for a small or medium-sized company, over up to 60 months (BanEcuador).

What follows is not advice; it summarizes what the texts and statements cited imply.

• The deadline falls on December 15 according to the government, or on December 18, counted from the gazette. Nothing has moved it.
• The text in force asks for generation covering “the totality” of energy and power demand during disconnection periods; the president has spoken of 30%. No ARCONEL rule has settled the difference yet.
• The law allows self-supply generation to belong to third parties, and the decree mentions rented or contracted generation; the rule on how compliance is shown is missing.
• Distributors keep a register of which companies generate, which are installing and which are planning, and report it monthly.
• According to the minister, those who do not comply may stay connected on barge electricity, paying its cost. The sources reviewed show no rule behind the fines announced.
• Compensation for running sets during a deficit requires at least 100 kW, qualification, a sealed meter and unsubsidized industrial fuel, and also covers rented or contracted sets.
• A grid-tied solar system goes through the distributor and, on its own, does not supply a plant during a disconnection.
• Until an instrument is published, the VAT and ISD removal remains an announcement.
• Consumers on the social-assistance, public-benefit, drinking-water and official-entity tariffs are exempt.

• The roughly 21 ARCONEL regulations to apply Decree 515, due by the end of May 2027, above all the one that defines what counts as compliance.
• What the government does on December 15: the barge tariff, disconnections and fines.
• The reform of Regulation 002/26 on generator sets, which took comments until September 14 (ARCONEL).
• The high-voltage tariff for 2027: the temporary one covers consumption to December 2026, and no other had been published by November 8.
• The instrument that puts the VAT and ISD removal into effect, and which equipment it covers.
• ARCONEL’s compensation rates, updated on the 12th of each month with fuel prices (ARCONEL).

The legal texts were read in their publications: Decree 32 in the copy published by FielWeb, with the publication date recorded in ARCONEL’s consolidated regulation; Decree 515 and Resolution ARCONEL-009/2026 with its tariff annex in the Ninth Supplement of Registro Oficial 380, in the copy published by Expreso (the issue is listed on the Registro Oficial’s site); Regulation 004/25 in the Second Supplement 158; Regulation 002/26 in the Fourth Supplement 342; the self-supply law in the Fifth Supplement 234; Regulation 005/24 in its consolidated version; and the compensation rates in Resolution ARCONEL-ARCONEL-2026-0032-RES of October 12, 2026. The diesel price is from EP Petroecuador’s table of terminal prices for the same period. The 18 months are counted from Decree 32’s publication. Equipment costs and lead times come from suppliers, consultants and business associations quoted in the press, official statements are attributed to whoever made them, and quotations from Spanish texts are translated.

This article describes public rules and figures; it is not legal, tax or financial advice. Data to November 8, 2026; the rules, tariffs and rates cited may change.