Energy policy needs more facts and less delusion

Paraguay's government is facing sharp criticism over its energy policy, with officials touting plans for diversification and future energy security while tangible progress remains elusive. Javier Giménez, the chief of staff of the Civil Cabinet of the Presidency, spoke of "plans to diversify" the national energy matrix and "avoid" the country exhausting its electricity surplus by 2030, stating Paraguay is in a "crucial period" with work underway on "several fronts."

However, critics argue that the government has achieved virtually nothing in three years to ensure the rational and efficient use of the country's energy resources. Giménez mentioned various alternatives being analyzed, including natural gas-powered thermoelectric plants, repowering existing hydroelectric facilities, solar energy projects with battery storage, wind farms, and small hydroelectric plants. Yet, the only concrete initiatives appear to be a pilot project with floating solar panels on the Itaipú reservoir, primarily driven by Brazil, and a preliminary plan for a 140 MW photovoltaic plant in the Chaco region, which is still in the early stages of tender preparation.

This proposed photovoltaic plant, described by the government as a "mega-project," would contribute only slightly more than half the capacity of the Acaray plant and represent a mere 2.5% of national electricity demand. This is insufficient to significantly impact Paraguay's energy matrix. Furthermore, critical infrastructure projects are facing substantial delays. The 500 kV Itaipú-Valenzuela transmission line, which should already be completed, is 60% behind schedule, and the Yguazú substation lacks the necessary transformers to bring Paraguay's surplus energy into the national grid.

These delays mean that the availability of electricity surpluses for use or auction remains a distant prospect. Compounding the issue, the government missed a "historic opportunity" to negotiate structural changes to the Itaipú Treaty during the review period of Annex C, making fundamental modifications now significantly more challenging due to the complex parliamentary approval process required.