*Article* **Potential and Impacts of Cogeneration in Tropical Climate Countries: Ecuador as a Case Study**

**Manuel Raul Pelaez-Samaniego 1, Juan L. Espinoza 2,\*, José Jara-Alvear 3, Pablo Arias-Reyes 4, Fernando Maldonado-Arias 5, Patricia Recalde-Galindo 6, Pablo Rosero 6 and Tsai Garcia-Perez 1**


Received: 29 August 2020; Accepted: 24 September 2020; Published: 10 October 2020

**Abstract:** High dependency on fossil fuels, low energy efficiency, poor diversification of energy sources, and a low rate of access to electricity are challenges that need to be solved in many developing countries to make their energy systems more sustainable. Cogeneration has been identified as a key strategy for increasing energy generation capacity, reducing greenhouse gas (GHG) emissions, and improving energy efficiency in industry, one of the most energy-demanding sectors worldwide. However, more studies are necessary to define approaches for implementing cogeneration, particularly in countries with tropical climates (such as Ecuador). In Ecuador, the National Plan of Energy Efficiency includes cogeneration as one of the four routes for making energy use more sustainable in the industrial sector. The objective of this paper is two-fold: (1) to identify the potential of cogeneration in the Ecuadorian industry, and (2) to show the positive impacts of cogeneration on power generation capacity, GHG emissions reduction, energy efficiency, and the economy of the country. The study uses methodologies from works in specific types of industrial processes and puts them together to evaluate the potential and analyze the impacts of cogeneration at national level. The potential of cogeneration in Ecuador is ~600 MWel, which is 12% of Ecuador's electricity generation capacity. This potential could save ~18.6 × 10<sup>6</sup> L/month of oil-derived fuels, avoiding up to 576,800 tCO2/year, and creating around 2600 direct jobs. Cogeneration could increase energy efficiency in the Ecuadorian industry by up to 40%.

**Keywords:** cogeneration; trigeneration; sustainability; industrial energy efficiency; tropical climate country; biomass

#### **1. Introduction and Literature Review**

Energy is key for people's well-being and for a countries' development. Still, current global energy use and production heavily relies on fossil derived fuels and electricity produced using this type of fuel. For instance, in 2018, 85% of the worldwide fuel consumption had its origin in fossil fuels. The total petroleum, coal, and natural gas consumption reached 4714 MTOE/year (Million tons of oil equivalent per year), 3744 MTOE/year, and 3328 MTOE/year, respectively [1]. One of the negative consequences

of the large consumption of fossil fuels is the raising of greenhouse gas (GHG) emissions that are responsible for global warming. In addition, for several developing countries (especially tropical climate countries), there are pending tasks to fully meet energy needs and make energy generation and use more sustainable. Low energy e fficiency, poor diversification of energy sources, low rate of access to electricity service, and necessity to make the energy systems less dependent on fossil fuels are among those pending tasks. The necessity of reducing the use of fossil fuels is critical as these countries may su ffer the impact of climate change more intensively (in part due to energy-related activities). The associated costs to mitigate such impacts are very high [2–4]. Although tropical climate countries possess a benign weather and a diversity of energy resources, balancing electricity generation with weather conditions and the reduction of energy sources (e.g., hydropower) are forcing those countries to look for new options for electricity generation and management. This is the case for Ecuador.

The Ecuadorian energy matrix highly depends on oil and oil-derived fuels, which are used in the transportation and industrial sectors, as well as in households (mainly as fuel for cooking) and for electricity generation (in smaller amounts) [5–7]. The transportation and the industrial sectors are responsible for 42% and 18% of the total fuel consumption, respectively [8,9]. Lack of natural gas (NG) sources and insu fficient oil refining capacity force the country to import part of the fuels used. The high expenses to import these fuels and the resulting negative environmental consequences are driving Ecuador to look for alternatives to imported fuels and to make the energy sector more sustainable. The Ecuador's GHG inventory shows that the energy sector in the country is responsible for 46.6% of the total of CO2eq emissions [10]. Heat for running industrial processes is produced mostly by burning subsidized oil-derived fuels, especially diesel and fuel oil [5,7,9] and only a few companies use renewable energies (particularly biomass) to produce heat and power. Recent attempts made by the Ecuadorian governmen<sup>t</sup> to reduce or eliminate subsidies to fuels have failed due to political and social pressure.

The electricity generation in Ecuador, on the other hand, is almost entirely based on hydropower. The current hydropower installed capacity in the country is ~5000 MW, from which 88% corresponds to power plants located in rivers that discharge into the Amazonian river basin, while the rest corresponds to plants located in rivers that discharge into the Pacific Ocean. Hydropower generation, however, has problems to adjust to the country's seasonal rains, which negatively impacts electricity production. Locating hydropower plants on both sides of the Andes Mountains has been a strategy for partially balancing the seasonality of rains. Figure 1 shows the variation of water inflow in hydropower plants located in the Amazonian River and the Pacific Ocean basins in Ecuador. The power generation is proportional to water inflow in the plants. It is seen that from October to January, the water inflow is reduced as a consequence of lower rainfalls [11,12]. Since the seasonality of hydropower generation could jeopardize the electricity supply and its sustainability in the mid-term, Ecuador is currently looking for options to ensure electricity generation in coming years, especially during the dry season. The adoption of the National Plan of Energy E fficiency 2016–2035 (known as PLANEE 2016–2035) is expected to have a positive impact on the energy demand and use [7,8]. In addition, the Ecuadorian State aims to increase the incipient participation of other renewable energy sources (i.e., wind, solar, and biomass) in the electricity sector [7]. In 2017, hydroelectricity contributed with more than 80% of the total electricity generated in the country, but the share of other renewable energy sources was only 0.5% (16.5 MW wind, 24 MW photovoltaic) [13], whereas in 2019, the hydropower share was 85% [14]. In the following years, wind farms (160 MW total) and solar photovoltaic (200 MW) projects will start operating. Nevertheless, although the electricity generation capacity in Ecuador has shown improvements, the negative e ffects of rains seasonality are unavoidable in coming years, and new electricity generation methods are sought. The PLANEE 2016–2035 foresees that the industry can play an important role by becoming more energy e fficient and by generating its own electricity (at least partially) through cogeneration [8]. Besides, the substitution and/or better use of fossil fuels to produce heat in the industrial sector is a pending task.

**Figure 1.** Monthly variation of water inflow in hydropower plants located in the Amazonian River and the Pacific Ocean basins in Ecuador. Thick lines show mean values from 1964 to 2016 [14,15].

Cogeneration has been recognized as a key element for the diversification of the electricity generation matrix (to help balancing the seasonal hydropower generation), for the reduction of the costs of subsidies to energy in the Ecuadorian industry (by making a better use of fuels for heat production), for the increase in energy efficiency, and for reducing GHG emissions [8]. However, further work is required to determine how much the potential of cogeneration in the Ecuadorian industry is and to define strategies for implementing cogeneration in this sector. Year-round tropical climate, subsidies of the state to fossil fuels and electricity, and insufficient energy policies to promote investments in the energy sector are factors that have hindered the penetration of cogeneration in the country. Because of the relatively constant year-round temperature conditions, indoor heating is not required, even in the Andean highlands (where temperature normally varies between 7 and 23 ◦C). Thus, cogeneration has been adopted only marginally in the industrial sector. Our field work (see Section 2.1.2 for details) and [8,9] have identified that Ecuador's current installed cogeneration capacity is 172 MWel, which represents only 2% of the total (nominal) electricity generation capacity (i.e., 7361 MWel) [7]. Lignocellulosic biomass is the main fuel employed for cogeneration due to the utilization of bagasse in the sugarcane industry (Table 1). Although there are abundant lignocellulosic biomass resources in the country (e.g., oil palm, rice, banana, and wood residues), the use of these energy sources for cogeneration in the country is very low [7]. For example, in Ecuador, there are currently 35 companies that process oil palm fruit and 4 companies that produce oil from oil palm kernel, of which only 2 currently use cogeneration. Because of the positive impacts of biomass for cogeneration [16], the use of this fuel deserves more attention in the country. In addition to the existing installed cogeneration capacity in the country, there is a thermal power plant (Termogas Machala, 132 MWel of installed capacity) [15] that is currently being retrofitted for operating as a combined cycle (CC) plant by adding heat recovery steam generators (HRSG) and steam turbines. This plant runs with natural gas—NG (obtained from the Gulf of Guayaquil) and gas turbines.

Despite the positive reputation and the extended use of cogeneration worldwide (especially in temperate climate countries), there are not enough studies showing the potential of cogeneration of whole industrial sectors or how cogeneration, in the conditions of tropical climate countries, could contribute to meet energy requirements, help to increase energy efficiency, reduce national GHG emissions, and, thus, contribute to sustainable development. For some tropical climate countries, there exists some studies focused on cogeneration in specific industrial sectors, such as the sugarcane industry [17–25], the oil palm industry [26–28], and the wood processing industry [16,29–33]. The methodologies and learnings from

those works can be used to conduct a wider analysis on the impacts of cogeneration in a whole country or geographic region, although more research overall is necessary. Thus, the objective of this paper is two-fold: first, to compute the potential of cogeneration in the Ecuadorian industry, and, second, to show the positive impacts of cogeneration on power generation capacity, GHG emission reduction, industrial energy e fficiency, and the economy of the country. The presence of subsidies from the state to both electricity and fuels in Ecuador, the seasonality of rains to run hydropower plants, and its year-round tropical weather are particular challenges considered in the study.


**Table 1.** Ecuador's current cogeneration installed capacity.

N/A—information is not available.
