Energy expert Victorio Oxilia warned that any agreement to supply power to electro-intensive industries must at least cover the actual costs of the National Electricity Administration (ANDE). According to him, tariffs below this cost could jeopardize the state utility’s finances.
In an interview with Radio 1000, Oxilia addressed the controversy surrounding the decrees related to the Atome company project, which plans large-scale production of green fertilizers, and supported the government’s decision to temporarily suspend the process in order to deepen the technical discussion.
The expert emphasized that Paraguay needs investment and industrial development, but not at the expense of ANDE’s financial stability or the electric system’s capacity to serve the population. He explained that ANDE does not have surplus energy to meet such a large demand and will have to purchase most of the power from the binational hydroelectric plant Itaipú.
Oxilia pointed out that electro-intensive industries consume energy almost continuously, for more than 20 hours a day, requiring a steady and reliable supply. To ensure this, contracting capacity above the initial demand is necessary, which raises the final energy cost. He estimated that the cost for ANDE to provide firm energy to these industries is around 44 dollars per megawatt-hour, a figure higher than the 30 dollars per MWh contracted by Atome, indicating that the difference would have to be covered by other means.
Another challenge in setting a long-term tariff is the uncertainty surrounding the revision of Itaipú’s Annex C, which regulates the terms for contracting energy from the hydroelectric plant. The current agreement expires at the end of 2026, and there is still no clarity on future costs, which could significantly affect the amounts involved.
Oxilia suggested that one alternative would be to subsidize part of the energy cost to attract strategic investments, provided there is a clear and transparent justification for using public funds or Itaipú’s resources, demonstrating concrete benefits for the country such as job creation, technological development, and economic growth.
Regarding the diversification of Paraguay’s energy matrix, the expert agreed it is necessary but stressed that renewable sources like solar and wind do not guarantee continuous supply, which is essential for electro-intensive industries. Therefore, the sources capable of providing firm energy are mainly hydroelectric plants with reservoirs, thermal power plants, or nuclear energy.
He highlighted the importance of expanding national generation capacity to keep pace with growing demand and praised ANDE’s recent initiative to promote solar energy projects, emphasizing that the country must move quickly in this expansion.