The Role of Renewable Energies for the Sustainable Energy Governance and Environmental Policies for the Mitigation of Climate Change in Ecuador

Article The Role of Renewable Energies for the Sustainable Energy Governance and Environmental Policies for the Mitigation of Climate Change in Ecuador

Flavio R. Arroyo M. 1,2,* and Luis J. Miguel 1,3

1 Systems Engineering and Automatic Control, School of Industrial Engineering, Paseo del Cauce s/n, University of Valladolid, 47011 Valladolid, Spain; [email protected] 2 Faculty of Engineering, Physical Sciences and Mathematics, Av. Universitaria, Central University of Ecuador, 170129 Quito, Ecuador 3 Research Group on Energy, Economy and System Dynamics, School of Industrial Engineering, Paseo del Cauce s/n, University of Valladolid, 47011 Valladolid, Spain * Correspondence: ﬂ[email protected]

Received: 19 April 2020; Accepted: 21 July 2020; Published: 30 July 2020

Abstract: This article presents a comparative analysis of energy governance with respect to renewable energy sources in Ecuador. The use of renewable energy sources increases energy security and enables countries to achieve their climate mitigation goals. Ecuador’s energy mix is dominated using fossil fuels and produces only 7.8% of its energy supply from renewable energy. The scenario analysis suggests that using the example of international renewable energy policies will achieve sustainable energy development in Ecuador. Relying less on fossil fuels and decentralizing the electricity sector from the use of thermoelectric plants is the great challenge for the country. Using the enormous water potential that Ecuador has and taking advantage of the sources of solar, biomass and wind energy available in the country will reduce the forecast of 60,233.70 KT CO2 by 2030 that would be reached if current consumption conditions and energy mix are maintained, while designing a long-term energy planning with a greater participation of renewable energies would forecast a CO2 emission of 41,232.30 KT, that is, a reduction of 31.5% in emissions.

Keywords: energy governance; climate change; energy policy; economic growth; energy consumption; CO2 emissions

1. Introduction The scant results of different climate summits are just a sample of how far the world is from the necessary transition towards a system that provides energy services safely and sustainably. The key role of energy in global problems is clear. About two-thirds of greenhouse gas emissions causing climate change can be traced back to the use of fossil fuels. A new struggle over oil is raising fears of a new generation of geopolitical conflict. Global economic instability is strongly correlated to the volatility of the price of energy. Economic development is mostly defined by the process of overcoming energy poverty, although 1.6 billion people still lack access to even the most basic energy services [1]. Global primary energy consumption grew rapidly in 2018, led by natural gas and renewable energy. However, carbon emissions increased at their highest rate in 7 years. Primary energy consumption grew 2.9%, almost double the 10-year average of 1.5% per year and the fastest since 2010 [2]. The impacts of climate change continue to exert considerable costs on the global economy, especially for least developed countries, with little adaptability and resilience [3,4]. Energy-related carbon emissions grew 2.0%, again the fastest expansion in many years, with an increase in emissions of around 0.6 gigatons.

Energies 2020, 13, 3883; doi:10.3390/en13153883 www.mdpi.com/journal/energies Energies 2020, 13, 3883 2 of 18

The energy sector is continuously affected by rapid changes, including multilateral innovations. In the run-up to the COP21 climate conference in Paris in December 2015, more than 160 countries submitted national plans on how they intended to contribute to the objectives of the convention on climate change in the post-2020 period [5]. The new global energy governance agenda now overlaps with global environmental governance and the poverty alleviation agenda [6]. The protection of the environment and climate change promote the use of renewable energy. Renewable energy technologies could offer competitive cost options for the delivery of modern energy services in remote areas, while innovation and scale merit continue to achieve cost savings [7]. A robust dialogue on the nature, scope, and challenges of energy and climate governance must be initiated. Energy governance encompasses regulation and enforcement that aims to overcome collective action problems related to energy supply and use [8]. The concept of energy governance is highly context dependent. It generally includes policy-related attributes [9], such as international interactions, coordinated and interactive agreements, institutionalized rules and, finally, a complex and diverse range of stakeholder groups [10]. Energy governance is a process of coordination between public-private institutions in order to decide how to provide energy services [11]. It is understood as a system of regulation of energy-related interactions between the State, society and the economy [12]. Energy as a field of politics is an almost classic cross-cutting theme, closely related to climate policies, but also to development cooperation, research and innovation, trade, and foreign and security policies [13]. One of the key factors brought together by the study of global environmental policy and energy research is the threat of climate change [14]. Problems caused by fossil fuels, including widespread air pollution and climate change, have led governments, companies, investors and the public to recognize the need to decarbonize the world economy. Climate change poses an existential threat to humanity and the Earth’s ecosystems. Unless urgent steps are taken to decarbonize the energy sector, the world comply with the Paris Agreement [15]. Most pathways to a low carbon economy would require a rapid deployment of renewable energy and doubling energy efficiency, given that the energy sector accounts for two thirds of global emissions [16]. Ref. [17] has shown that implementing renewable energy combined with an improved energy efficiency provides the most cost-effective way to achieve 90% reduction in energy related emissions. Energy efficiency enables economic growth with lower energy inputs. In the 20th century, the average growth rate of energy demand was 3%, almost equal to the growth rate of world GDP. In recent decades, improvements in energy efficiency have overcome this correlation. The demand for primary energy is forecast to grow 1% annually until 2040 [18]. Energy transition implies a profound economic, industrial and social transformation. It could affect prosperity, employment and social organization as much as the first Industrial Revolution. Renewable energies bring several macroeconomic advantages. For example, by 2050, the cost of energy could go from 5% of world GDP to just over 2% of a much larger world economy [19]. The promotion of renewable energy and energy efficiency are popular ways for countries to achieve their energy and environmental goals and for decarbonization and decontamination in the future energy matrix [20]. Studies carried out by [21] propose a long-term energy and climate planning that includes two strategic elements and processes: the National Integrated Energy and Climate Plan with a ten-year perspective, and the strategies for long-term low emissions with a fifty-year perspective. Energy and climate change policies must not be complicated; clean energy must be supplied at a competitive cost aimed at reducing emissions [22]. Based on their situations and concerns regarding energy, different countries may adopt different policies and legal measures for energy transition. To reduce the effects of the environmental problem, governments must develop and implement energy conservation policies [23]. The investigations of [24–26] conclude that energy consumption often affects economic growth. The studies of the European Union have proposed policies for an energy transition that can be summarized in three key Energies 2020, 13, 3883 3 of 18 elements: reduction of emissions, development of renewable energies and energy efficiency. These three elements are intertwined and should be considered a priority [24]. Several studies have been carried out on energy efficiency and renewable energy as a problem of global energy governance [25,26]. Ref. [27] studied the compatibility of combining economic growth with the control of climate change. The relationships between the various indicators of economic growth and productivity were tested using two different ways to calculate carbon intensity. High carbon intensity sectors show absolute growth in terms of production and associated emissions. Green growth will require radical change or huge technological improvements. Ecuador is currently undergoing a massive change in the energy sector. The country is shifting from heavy dependence on fossil fuels to almost complete self-sufficiency through renewable energy, especially hydroelectric power. The country is also improving its energy transfer infrastructure to allow massive loads to be transported more efficiently at high voltage. Ecuador is a country with some important aspects when analyzing the energy sector. A remote oil-producing region limited financial resources and lack of infrastructure are just some of the great challenges that the country must face when exploring its natural resources, while guaranteeing its diverse and unique Amazon ecosystem [28]. Ecuador’s economy operates around the supply of non-renewable natural resources: mainly crude oil and, to a lesser extent, gas and other minerals. Ecuador has a high economic vulnerability due to dependence on oil exports and its fluctuating price [29], oil production approaching its maximum peak, fossil fuel prices being highly subsidized [30], significant potential for the use of hydroelectric energy and/or other renewable energy sources [31]. A key moment for Ecuador’s energy policy was 1979, when, after a decade of military dictatorship, Ecuador returned to a nominally democratic system. National strategic resources, including the exploitation of primary energy resources and the generation of electricity,were privatized. The electricity sector pursued a combination of hydrothermal electricity, consisting of large-scale hydroelectric power plants and fossil fuel-based thermoelectric plants [31]. In 2008, a new constitution was drafted. The new approach aimed at reverting to a state-controlled natural resource management system, and the country set out to making its energy matrix cleaner and more environmentally sustainable. The control of the energy sector shifted from a mainly privately-owned system to a centralized State-owned system. The period from 2008 to 2014 has generally been characterized by economic prosperity as a result of high oil prices and increased production from mature oil fields in the Amazon [32]. The government implemented policies to promote hydroelectric energy and unconventional renewable energy, which have not reached the expected performance. Energy subsidies remained among the highest in the world, which has led the transport sector to become the fastest growing sector of the economy in terms of energy consumption [33]. Ecuador exports crude oil and imports fossil fuels, which causes a significant imbalance in the national economy. In 2013, the Ministry of Electricity and Renewable Energy introduced the concept of “change of energy matrix” or “energy transition” in order to legitimize a new energy policy based mainly on the use of renewable energy. This commitment to clean energy was mainly intended to be implemented by the electricity sector. It would contribute to greater environmental care and would begin a post-oil period by reducing fossil fuel-based thermoelectric plants and investing in eight new hydroelectric plants. In Ecuador, several policies have been incorporated to promote the use of non-conventional renewable energy. The 1998 Constitution of the Republic already established that the State will promote its use, while in the 2008 Constitution strengthened this principle and incorporated the concept of energy efficiency [34]. In 2000, Ecuador ratified the Kyoto Protocol, and therefore can participate in the application of the Clean Development Mechanism (CDM). Given its geographical conditions, there is significant potential to apply technologies with renewable energies. Hydroelectric energy will prevail in the short and medium term in the country, since the country still has great potential and in full use. Ecuador requires other energy sources to Energies 2020, 13, 3883 4 of 18 diversify generation and reduce the vulnerability of the electricity system, avoiding the increase in high-cost and high-impact thermoelectric generation.

2. Materials and Methods Strategic energy forecasting consists of determining and analyzing the most probable future scenarios for a given energy system and constitutes an indispensable tool to develop the most appropriate strategic options. Projections of future energy demand and composition have implications for policy decisions [35]. Energy system models are important methods used to generate a range of knowledge and analysis of energy supply and demand. Regardless of how power systems modeling develops, policymakers and analysts who support them should focus on understanding the assumptions included in any modeling output [36]. This research mainly has a two-part methodology that includes literature review and evaluation and scenario analysis using system dynamics (SD). Systems dynamics methodology has been widely used to model complex systems in which feedbacks, delays, and nonlinearities are frequent [37,38]. Some of these applications have been aimed at modelling energy and environmental systems [39–41], as well as integrated evaluation models [42,43]. These models represent the relationships between the main variables using flows and stocks in an easily understandable way. From all the analyses of the literature review, it is understood that the promotion of renewable energy and energy efficiency will help Ecuador achieve its objectives in the energy field. This research mainly has a two-part methodology that includes literature review and evaluation and scenario analysis using system dynamics (SD). From all the analyses of these reviews, it is understood that the promotion of renewable energy and energy efficiency will help Ecuador achieve its objectives in the energy field. The evaluation in this document seeks to clarify “which are” the current energy policy instruments related to renewable energy and energy efficiency in Ecuador, comparing the situation to the rest of the world. It also seeks to identify what should be considered in the future, considering Ecuador’s economic sectors. After the evaluation process, it was determined that the possible future challenges of energy policy will show and emphasize how future policies should be designed in Ecuador by decision makers in the last part of the discussion section.

2.1. Summary of the Energy Sector in Ecuador

2.1.1. Characterization of the Supply and Demand of Energy Ecuador’s primary energy matrix has been dominated by oil production since the beginning of its exploitation in the Amazon (Figure1). Renewable energies have had little participation, however, the production of hydraulic energy in the last fifteen years has grown significantly, reaching an important participation in the national energy matrix. Other renewable energy sources such as wind and photovoltaic continue to be of little importance and specific low-generation projects are promoted [44]. Total secondary energy production has remained at levels close to 70 MBOE between 2003 and 2015, with fuel oil as the main source of secondary energy produced in the country, followed by diesel until 2011, becoming the second most produced secondary source electricity and almost on par with fuel oil in 2012 (Figure2). In Ecuador, the final energy consumption is mainly distributed in six economic sectors, as shown in Figure3. In 2016, the transport sector further increased its energy demand, reaching growth of 74% compared to 2000, while the industrial sector grew 54% and the residential sector 45%. The industrial sector reduced its energy consumption by 6% compared to 2015 [44]. Energies 2019, 12, x FOR PEER REVIEW 5 of 19

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Primary energy production (MBOE) production energy Primary 1500

100 Oil Natural Gas Firewood Cane Products 50Hydraulics Biomass Wind Solar

Figure 1. Primary energy production in Ecuador according to energy type [44,45]. Primary energy production (MBOE) production energy Primary 0

Total secondary energy production has remained at levels close to 70 MBOE between 2003 and 2015, with fuel oil as the main source of secondary energy produced in the country, followed by diesel Oil Natural Gas Firewood Cane Products until 2011, becoming the second most produced secondary source electricity and almost on par with Hydraulics Biomass Wind Solar fuel oil in 2012 (Figure 2). Figure 1. Primary energy production in Ecuador according to energy type [44,45]. Figure 1. Primary energy production in Ecuador according to energy type [44,45]. 90 Total secondary80 energy production has remained at levels close to 70 MBOE between 2003 and 2015, with fuel oil70 as the main source of secondary energy produced in the country, followed by diesel until 2011, becoming60 the second most produced secondary source electricity and almost on par with fuel oil in 2012 (Figure50 2). 40 90 30 80 20 70 10 60 0

50 Secondary energy production (MBOE)production energy Secondary 40 30 LGP Electricity Gasolines Kerosene and Turbo Diesel Oil Fuel Oil 20 Energies 2019, 12, x FOR PEERGases REVIEW Residue Non Energetic 6 of 19 10 Figure 2. Total secondary energy production in Ecuador for diﬀerent sources [44,45]. Figure 2.0 Total secondary energy production in Ecuador for different sources [44,45].

Secondary energy production (MBOE)production energy Secondary 100 In Ecuador, the90 final energy consumption is mainly distributed in six economic sectors, as shown in Figure 3. In 2016,80 the LGPtransport sector furtherElectricity increased its energy demand,Gasolines reaching growth of 74% Kerosene and Turbo Diesel Oil Fuel Oil compared to 2000, 70while the industrial sector grew 54% and the residential sector 45%. The industrial Gases Residue Non Energetic sector reduced its energy60 consumption by 6% compared to 2015 [44]. Figure50 2. Total secondary energy production in Ecuador for different sources [44,45]. 40 In Ecuador, the30 final energy consumption is mainly distributed in six economic sectors, as shown in Figure 3. In 2016,20 the transport sector further increased its energy demand, reaching growth of 74% compared to 2000,10 while the industrial sector grew 54% and the residential sector 45%. The industrial sector reduced(MBOE) consumpion energy Final its energy0 consumption by 6% compared to 2015 [44].

Transportation Industry Residential Commercial, Pub. Ser Agriculture, fishing, mining Construction, others

Figure 3. Final energy consumption in Ecuador according to productive sector [44,45]. Figure 3. Final energy consumption in Ecuador according to productive sector [44,45].

2.1.2. Renewable Energy and Generation Potential

The past decade has seen strong growth in the deployment of renewable energy technologies, with the electricity sector leading the way thanks to sharp cost reductions for solar photovoltaic (PV) and wind power. The development of new technologies is a key requirement for expanding the use of renewable energy sources. Since renewable resources vary so much by region, state and local efforts could play a useful role in promoting their development [46]. The 2013–2022 Electrification Master Plan details the energy potential for hydroelectric, geothermal, solar and wind resources. The calculated theoretical hydroelectric resource amounts to 90,976 MW; however, 21,903 MW are considered technically and economically usable [47]. In the case of geothermal energy, a hypothetical potential of 6500 MW is available [48]. Regarding solar resources, in 2008, National Electricity Council (CONELEC) published the first Solar Atlas. This has allowed locating local power generation projects: 2.8 MW, under construction, in addition to 907.94 MW from other potential projects [49]. In 2013, the Wind Atlas was published, which determined that Ecuador’s gross wind potential is 1671 MW with an average energy production of 2869 GWh/year [50]. Ecuador has an enormous diversity of biomass source to produce energy and other products. Although important steps have been taken to encourage the use of biomass for energy purposes, hard work is still required to achieve a greater participation of this renewable energy source in the national energy matrix [44]. Ecuador is a country that has a high potential for water resources. For the water system of continental Ecuador, a water potential measured in flow equal to 16,500 m3/s is estimated; of which 11,715 m3/s correspond to the Amazon slope, and 4785 m3/s to the Pacific slope [34]. The (CONELEC) has studied the country’s potential for hydroelectric generation; and as a result of these studies and investigations, a potential of 2255.94 (MW) and an average annual energy of 11,837.29 (GWh/year) have been determined [51].

2.1.3. Economic and Energetic Context The debate on the economic impact on the environment today is wide. Two scenarios can be defined: optimistic and pessimistic. Optimists argue that, as resources run out, the economy will replace them with others. Sustained economic growth will produce a less polluted world. On the other hand, pessimists claim that, if the current trend of economic growth persists, the world will become more polluted and the supply of certain essential resources will decrease or can even be forever lost, without the possibility of finding substitutes. The extraction, conversion and use of energy have a considerable influence on the environment and external costs. While replacing fossil

Energies 2020, 13, 3883 6 of 18

2.1.2. Renewable Energy and Generation Potential The past decade has seen strong growth in the deployment of renewable energy technologies, with the electricity sector leading the way thanks to sharp cost reductions for solar photovoltaic (PV) and wind power. The development of new technologies is a key requirement for expanding the use of renewable energy sources. Since renewable resources vary so much by region, state and local efforts could play a useful role in promoting their development [46]. The 2013–2022 Electrification Master Plan details the energy potential for hydroelectric, geothermal, solar and wind resources. The calculated theoretical hydroelectric resource amounts to 90,976 MW; however, 21,903 MW are considered technically and economically usable [47]. In the case of geothermal energy, a hypothetical potential of 6500 MW is available [48]. Regarding solar resources, in 2008, National Electricity Council (CONELEC) published the first Solar Atlas. This has allowed locating local power generation projects: 2.8 MW, under construction, in addition to 907.94 MW from other potential projects [49]. In 2013, the Wind Atlas was published, which determined that Ecuador’s gross wind potential is 1671 MW with an average energy production of 2869 GWh/year [50]. Ecuador has an enormous diversity of biomass source to produce energy and other products. Although important steps have been taken to encourage the use of biomass for energy purposes, hard work is still required to achieve a greater participation of this renewable energy source in the national energy matrix [44]. Ecuador is a country that has a high potential for water resources. For the water system of continental Ecuador, a water potential measured in flow equal to 16,500 m3/s is estimated; of which 11,715 m3/s correspond to the Amazon slope, and 4785 m3/s to the Pacific slope [34]. The (CONELEC) has studied the country’s potential for hydroelectric generation; and as a result of these studies and investigations, a potential of 2255.94 (MW) and an average annual energy of 11,837.29 (GWh/year) have been determined [51].

2.1.3. Economic and Energetic Context The debate on the economic impact on the environment today is wide. Two scenarios can be defined: optimistic and pessimistic. Optimists argue that, as resources run out, the economy will replace them with others. Sustained economic growth will produce a less polluted world. On the other hand, pessimists claim that, if the current trend of economic growth persists, the world will become more polluted and the supply of certain essential resources will decrease or can even be forever lost, without the possibility of finding substitutes. The extraction, conversion and use of energy have a considerable influence on the environment and external costs. While replacing fossil energy with renewable energy technologies can often reduce greenhouse gas emissions and, to some extent, other environmental effects and external costs, these technologies may also impact the environment and external costs, according to the energy source and technology used [52]. The current population of Ecuador is approximately 17.35 million inhabitants, the GDP per capita in 2018 was 6344.87 (current USD). The oil sector of the country continues to be the main source of foreign exchange, but it has strongly reduced its participation in national GDP, from 13.2% in 2011 to 4.8% in 2017, according to the World Trade Organization (WTO). The poverty rate fell from 29.6% in 2011 to 24.5% in 2018. External debt rose to $39.5 billion at the end of 2017, when in 2011 it amounted to c. Sending remittances amounted to $2840 million in 2017. Energy is a fundamental input in the quality of life of the population and in the productivity of a society. Although the production of renewable energy since 2005 has increased by almost 100% in 2016, its participation barely reaches 5% of the total primary energy produced in Ecuador [39,40,45,47]. The participation of renewable energies in the energy matrix of Ecuador considers the following aspects; electricity generation, using natural resources in hydroelectric, wind, biomass (co-generation) and solar (photovoltaic) projects. Projects have been implemented to use biofuels for transportation, through the consumption of extra gasoline with ethanol (pilot project in the city of Guayaquil). On the other hand, in several homes solar water heating systems have been installed. The indicators considered are those Energies 2019, 12, x FOR PEER REVIEW 7 of 19 energy with renewable energy technologies can often reduce greenhouse gas emissions and, to some extent, other environmental effects and external costs, these technologies may also impact the environment and external costs, according to the energy source and technology used [52]. The current population of Ecuador is approximately 17.35 million inhabitants, the GDP per capita in 2018 was 6344.87 (current USD). The oil sector of the country continues to be the main source of foreign exchange, but it has strongly reduced its participation in national GDP, from 13.2% in 2011 to 4.8% in 2017, according to the World Trade Organization (WTO). The poverty rate fell from 29.6% in 2011 to 24.5% in 2018. External debt rose to $39.5 billion at the end of 2017, when in 2011 it amounted to c. Sending remittances amounted to $2840 million in 2017. Energy is a fundamental input in the quality of life of the population and in the productivity of a society. The indicators considered are those suggested at the regional level by the methodological guide of the study Energy and Sustainable Development in Latin America and the Caribbean [53]. Although the production of renewable energy since 2005 has increased by almost 100% in 2016, its participation barely reaches 5% of the total primary energy produced in Ecuador [39,40,45,47]. The participation of renewable energies in the energy matrix of Ecuador considers the following aspects; electricityEnergies 2020 generation,, 13, 3883 using natural resources in hydroelectric, wind, biomass (co-generation) 7and of 18 solar (photovoltaic) projects. Projects have been implemented to use biofuels for transportation, through the consumption of extra gasoline with ethanol (pilot project in the city of Guayaquil). On thesuggested other hand, at the in several regional homes level solar by the water methodological heating systems guide have of thebeen study installed Energy and Sustainable Development in Latin America and the Caribbean [53] (Figure4).

Evolution of the indicators of Sustainable Development

Energy self- sufficiency 1 0.8 Use of renewable 0.6 Robustness against energy 0.4 external changes 0.2 0

Relative purity of Energy productivity energy use

Electric coverage

2007 2016

Figure 4. Evolution of sustainable development indicators (Minister of Electricity and Renewable FigureEnergy 4. [44Evolution]. of sustainable development indicators (Minister of Electricity and Renewable Energy [44]. 2.2. Scenario Analysis 2.2 ScenarioThe construction Analysis of scenarios allows exposing a set of alternatives regarding the future, it can be defined as the creation of multiple possible futures to support strategies [54]. Scenarios are descriptions of tripsThe toconstruction possible futures of scenarios that have allows diff exposingerent assumptions a set of alternatives about how regarding current trendsthe future, develop, it can how be definedcritical uncertainties as the creation develop, of multiple and what possible new factors futures may change to support over time strategies leading [54] to strategic. Scenarios planning. are descriptions of trips to possible futures that have different assumptions about how current trends In this case, the energy prospect and the CO2 emissions in Ecuador is to be identified. The settings develop,necessarily how include critical subjective uncertainties elements develop, and and are openwhat tonew various factors interpretations. may change over Three time scenarios leading were to strategicdeveloped planning. to consistently In this describe case, the the energy relationships prospect between and the energy CO2 supply emissions and demand in Ecuador and emissions is to be identified.in the country. The The settings formulation necessarily of the include scenarios subjective is necessary elements to predict and the are evolution open to of the various main interpretations.variables, which Three can promote scenarios energy were generationdeveloped policies, to consistently and to project describe consumption the relationships and mitigation between of energy supply and demand and emissions in the country. The formulation of the scenarios is CO2 emissions. Our methodology considers three scenario approaches: SCERARIO1 The Business As Usual (BAU) scenario projects the current trends identified by each nation. It assumes that past trends

will continue in the future and that no new energy saving, nor environmental protection policies will be implemented [55]. SCENARIO2 (The National Policies) includes the government plans and strategies that have been established for the coming years in Ecuador in terms of energy production and consumption. The following documents are considered: National Energy Agenda 2014–2040, National Energy Balance 2015–2017, National Energy Efficiency Plan 2016–2035, Electricity Master Plan 2016–2025, Electrification Master Plan 2013–2022, Analysis of R&D&I opportunities in Energy Efficiency and Renewable Energies in Ecuador, National Strategy for Climate Change of Ecuador 2012–2025. Finally, SCENARIO3 (Global policies and trends), considering the environmental dimension of the objectives of sustainable development, global environmental governance, multilateral environmental agreements and global macroeconomic perspectives for sustainable development. Replacement plans for clean energy and energy efficiency will serve as the basis, or the trends in the reports of organizations such as the Intergovernmental Panel on Climate Change (IPCC), International Energy Agency (IEA), BP, among others. The model combines different sectors through feedback mechanisms to capture the complexity of the behavior of the economic-climatic system. The matrix of productive sectors in this study Energies 2020, 13, 3883 8 of 18 consists of six sections: (I) transport, (II) industry, (III) residential, (IV) commercial, services and public administration, (V) agriculture, fishing and mining, (VI) construction and others. The constant energy matrix of the following primary energy sources: oil, natural gas, hydroelectric energy, cane products, and other primary products. The final energy sources are electricity, LGP, gasoline, kerosene and air fuel, diesel, fuel oil, gases, reduced and non-energy crude oil. Renewable energies not included include photovoltaic, wind, biomass, biogas and biofuels [56]. This structural approach allows for a more scientific representation of feedback relationships. The simulation model is structured in three main modules: economy, energy demand and emissions. The main characteristics of each module are: Economy: The economy is modeled assuming the monetary value of the final goods and services produced by an economy in each period. The volume of economic activity during the study period is analyzed and considered considering the dynamic integration of regional and global input-output data. Energy Demand: Final energy demand by sector is estimated through projection of sectoral economic production, efficiency improvements, and energy replacements driven by national, regional, and global policies. Emissions: the global model calculates the production of CO2 emissions is set based on the consumption and type of energy considering the three scenarios proposed as a reference.

2.3. Modeling and Simulation The proposed model was simulated using Vensim software, a modeling tool commonly used to build, simulate, and analyze dynamic model systems based on causal loops or stock and flow diagrams. The model was designed to estimate economic growth, energy substitution and the CO2 emissions in Ecuador in 2030. To achieve the research objective, Ecuador’s traditional energy resources and possible renewable energy resources were considered. Consideration is being given to examining the impact of economic growth on energy consumption and the CO2 emission system. Figure5 shows the summary flow diagram of the Economic—Energy—Emissions system, the model analyzes the CO2 emissions that come from the energy demand of the different economic sectors of the country. There are three stocks in the proposed SD model including Final energy demand, GDP, Population. Total energy demand is the sum of the demand for different types of energy for each of the six economic sectors of Ecuador. Total CO2 emissions are the sum of the emissions by type of energy that each economic sectorEnergies demands. 2019, 12, x FOR PEER REVIEW 9 of 19

FigureFigure 5. 5.Economic—energy—carbon Economic—energy—carbon emissionsemissions system flow ﬂow diagram diagram in in Ecuador Ecuador (adapted (adapted from from [56] [56). ]).

3. Results Below are some of the most relevant results of modeling scenarios for the Ecuador energy system. For each of the productive sectors, the substitution of fossil energy for renewable energy has been proposed.

3.1. GDP per Capita The simulation of GDP per capita based on the projection of the three scenarios SCENARIO1, SCENARIO2 and SCENARIO3– shows a positive economic projection until 2030 (Figure 6): Economic growth would be between 35% and 37% in the first two scenarios, while there would be an increase reaching 60% compared to the year 2000 in SCENARIO3. Although the simulation shows economic growth, it is necessary to indicate that for the next decade the Economic growth is not very encouraging, so Ecuador’s GDP per capita would continue to be one of the lowest in Latin America [57], which could be attributed to high population growth and moderate economic growth [58]. Politically, a structural change in the Ecuadorian economy has been proposed, focusing on sustained and equitable economic growth in the long term [59].

Energies 2020, 13, 3883 9 of 18

3.1. GDP per Capita The simulation of GDP per capita based on the projection of the three scenarios SCENARIO1, SCENARIO2 and SCENARIO3– shows a positive economic projection until 2030 (Figure6): Economic growth would be between 35% and 37% in the ﬁrst two scenarios, while there would be an increase reaching 60% compared to the year 2000 in SCENARIO3. Although the simulation shows economic growth, it is necessary to indicate that for the next decade the Economic growth is not very encouraging, so Ecuador’s GDP per capita would continue to be one of the lowest in Latin America [57], which could be attributed to high population growth and moderate economic growth [58]. Politically, a structural change in the Ecuadorian economy has been proposed, focusing on sustained and equitable economic Energiesgrowth 2019 in, the12, x long FOR PEER term REVIEW [59]. 10 of 19

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SCENARIO 1 SCENARIO2 SCENARIO3

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Scenarios Energy Demand Transport 80000 70000 60000 50000 40000 30000 20000

Final energy demanda (KBOE) 10000

SCENARIO1 SCENARIO2 SCENARIO3 SCENARIO1 SCENARIO2 SCENARIO3 SCENARIO1 SCENARIO2 SCENARIO3 SCENARIO1 SCENARIO2 SCENARIO3 SCENARIO1 SCENARIO2 SCENARIO3 SCENARIO1 SCENARIO2 SCENARIO3 SCENARIO1 SCENARIO2 SCENARIO3 2000 2005 2010 2015 2020 2025 2030

Electricity Gasolines LPG Diesel Oil Fuel Oil Kerosene and Turbo Non Energetic

Figure 7. Final energy demand scenarios in the transport sector.

Energies 2019, 12, x FOR PEER REVIEW 10 of 19

5000

4500

4000

3500 (USD of 2007) of (USD

3000 thousands of US dollars / inhab / dollars US of thousands

2500 2000 2005 2010 2015 2020 2025 2030

SCENARIO 1 SCENARIO2 SCENARIO3

Figure 6. GDP per capita projection in thousands of US dollars/inhab (USD of 2007).

3.2. Final Energy Demand Figure 7 shows the scenarios of the final energy demand of the transport sector. The energy demand of this sector shows an upward curve in the case of the SCENARIO1, while in the case of SCENARIO2 and SCENARIO3, the energy demand stabilizes, and the increase is greater at the end of the evaluation period. This is mainly due to the substitution of fossil energy for renewable energy, which in the case of Ecuador would be hydropower. Energy efficiency and renewable energy policies can reduce the demand for, and supply of energy generated from fossil fuels [60]. The reduction in energy demand is associated with energy policies that seek to replace energy sources and improve its efficiency. The change in the energy mix will improve the efficiency of a sector that has traditionally been very inefficient energy wise. The projection of SCENARIO2 predicts a reduction of 25% in energy demand by the year 2030 if the current conditions of consumption and energy mix were maintained. Proposing policies of developed countries would forecast a further reduction, Energiesreaching2020 35%, 13, 3883 of the SCENARIO1 projection. 10 of 18

Scenarios Energy Demand Transport 80000 70000 60000 50000 40000 30000 20000

Final energy demanda (KBOE) 10000

Electricity Gasolines LPG Diesel Oil Fuel Oil Kerosene and Turbo Non Energetic Energies 2019, 12, x FOR PEER REVIEW 11 of 19 Figure 7. Final energy demand scenarios in the transport sector. Figure 7. Final energy demand scenarios in the transport sector. In the case of the industrial sector, the simulation of the scenarios shows an increase in energy In the case of the industrial sector, the simulation of the scenarios shows an increase in energy demand for the three scenarios. The most significant increase occurs in SCENARIO2, where energy demand for the three scenarios. The most significant increase occurs in SCENARIO2, where energy demand grows 140% regarding the simulation’s baseline (Figure 8). This is mainly due to government demand grows 140% regarding the simulation’s baseline (Figure8). This is mainly due to government policies that promote the industrial sector. The dependence on oil in the national economy fosters policies that promote the industrial sector. The dependence on oil in the national economy fosters change in the productive matrix by developing new industries such as refining, petrochemicals, steel, change in the productive matrix by developing new industries such as refining, petrochemicals, steel, shipyards and others [61]. SCENARIO2 proposes an increase in the use of renewable energy. For the shipyards and others [61]. SCENARIO2 proposes an increase in the use of renewable energy. For the industrial sector, an energy mix would be proposed with a 50% share of renewable energy, mainly industrial sector, an energy mix would be proposed with a 50% share of renewable energy, mainly hydropower, improving the energy efficiency of this sector and reducing CO2 emissions. On the other hydropower, improving the energy efficiency of this sector and reducing CO emissions. On the other hand, SCENARIO3, which promotes global policies, projects an increase of2 no more than 4% due to hand, SCENARIO3, which promotes global policies, projects an increase of no more than 4% due to energy efficiency and the use of renewable energy in this sector [62]. energy efficiency and the use of renewable energy in this sector [62].

Scenarios Energy Demand Industry 45000 40000

KBOE) 35000 30000 25000 20000 15000 10000

Final energy demanda ( 5000

Electricity Gasolines LPG Diesel Oil Fuel Oil Kerosene and Turbo Natural Gas Firewood Cane products FigureFigure 8.8. Final energy demanddemand scenariosscenarios inin thethe industryindustry sector.sector.

FigureFigure9 9 shows shows the the simulation simulation of of energy energy demand demand in in the the residential residential sector. sector. SCENARIO2 SCENARIO2 projects projects thethe highesthighest growth,growth, reachingreaching 160%160% ofof thethe valuevalue atat thethe startstart ofof thethe simulationsimulation inin 2016.2016. InIn thisthis scenario, aa change change in in the the consumption consumption structure structure can be can observed be observed in favor in of favor the increase of the inincrease the share in of the renewable share of energy.renewable The energy. plan to The replace plan the to LGPreplace by the electric LGPcooking by electric is one cooking of the is main one of factors the main for the factors mentioned for the change.mentioned Government change. Government policies propose policies the propose right that the Ecuadorians right that Ecuadorians must access must electrical access energy electrical and energy and the need for the sector to improve its energy efficiency. The growth in energy demand projected in SCENARIO3 is 42%, which is the lowest percentage of growth. This is based on energy efficiency plans and policies for the use of renewable energy proposed by developed countries.

Energies 2020, 13, 3883 11 of 18

Energiesthe need 2019 for, 12, thex FOR sector PEERto REVIEW improve its energy eﬃciency. The growth in energy demand projected12 of 19 in SCENARIO3 is 42%, which is the lowest percentage of growth. This is based on energy eﬃciency plans Energies 2019, 12, x FOR PEER REVIEW 12 of 19 and policies for the use of renewable energy proposed by developed countries. Scenarios Energy Demand Residential 40000 Scenarios Energy Demand Residential

3500040000 KBOE)

3000035000 KBOE) 2500030000 2000025000 1500020000

1000015000 Final energy demanda (

100005000 Final energy demanda ( 50000

2000 2005 2010 2015 2020 2025 2030

Electricity Firewod Kerosene and Turbo LPG Natural Gas Figure 9. Final energy demand scenarios in the residential sector. Figure 9. Final energy demand scenarios in the residential sector. Figure 9. Final energy demand scenarios in the residential sector. Regarding the commercial sector, Figure 10 shows the evolution of energy demand. The demand Regarding the commercial sector, Figure 10 shows the evolution of energy demand. The demand of of the residential sector presents a similar behavior to the demand of the residential sector. Scenario1 the residentialRegarding sector the commercial presents a similarsector, behaviorFigure 10 to shows the demand the evolution of the residentialof energy demand. sector. Scenario1 The demand that that contemplates government policies shows a steeper upward curve, by 2030 it will reach 12,989 contemplatesof the residential government sector presents policies a similar shows abehavior steeper upwardto the demand curve, byof the 2030 residential it will reach sector. 12,989 Scenario1 KBOE, KBOE, the substitution of sources and technologies is presented as the main measure; which would thethat substitution contemplates of sourcesgovernment and technologies policies shows is presented a steeper asupward the main curve, measure; by 2030 which it will would reach generate 12,989 generate significant changes in the consumption matrix of the commercial sector. The demand- signiﬁcantKBOE, the changessubstitution in the of sources consumption and technologies matrix of the is presented commercial as sector.the main The measure; demand-population which would population growth relationship would cause the growth of total consumption at the end of the study growthgenerate relationship significant would changes cause in the the consumption growth of total matrix consumption of the commercial at the end sector. of the The study demand period.- period. Electricity would continue to be the predominant source in the sector. The decrease in energy Electricitypopulation would growth continue relationship to be thewould predominant cause the sourcegrowth in of the total sector. consumpt The decreaseion at the in end energy of the demand study demand forecast by SCENARIO3 is due to energy efficiency policies that have been implemented in forecastperiod. Electricity by SCENARIO3 would iscontinue due to energyto be the e ﬃpredominantciency policies source that in have the sector. been implemented The decrease inin theenergy last the last decade by developed countries. decadedemand by forecast developed by SCENARIO countries. 3 is due to energy efficiency policies that have been implemented in the last decade by developed countries. Scenarios Energy Demand Commercial

14000 Scenarios Energy Demand Commercial

1200014000 KBOE)

1000012000 KBOE) 100008000

60008000

40006000

Final energy demanda ( 20004000

Final energy demanda ( 20000

2000 2005 2010 2015 2020 2025 2030

Figure 10. ScenariosDiesel Oil demandElectricity ﬁnal energyFuel Oil commercialLPG sector. Figure 10. Scenarios demand final energy commercial sector. In the agriculture,Figure ﬁshing 10. and Scenarios mining demand sector, final the energy three commercial scenarios project sector. an increase in energy demandIn the as agriculture, shown in Figure fishing 11 and. Within mining national sector, policies, the three the scenarios state has madeproject the an decisionincrease toin promote energy demandminingIn activitytheas shown agriculture, in allin Figure its phases,fishing 11. Withinand the increasemining national insector, energy policies, the demand three the state scenarios projected has made project by SCENARIO2the an decision increase to is sustainedinpromote energy miningdemand activity as shown in all in its Figure phases, 11 the. Within increase national in energy policies, demand the state projected has made by SCENARIO the decision2 is to sustained promote bymining the implementation activity in all its of phases, large-scale the increase mining projects,in energy which demand will projected require energy by SCENARIO and will 2reach is sustained 426.66 KBOEby the byimplementation 2030. The energy of large efficiency-scale mining and sprojects,ubstitution which by will clean require energy energy sources and contemplated will reach 426.66 in SCENARIOKBOE by 2030.3 projects The a energy lower energy efficiency demand and s 325.10ubstitution KBOE. by clean energy sources contemplated in SCENARIO3 projects a lower energy demand 325.10 KBOE.

Energies 2020, 13, 3883 12 of 18

Energiesby the 2019 implementation, 12, x FOR PEER of REVIEW large-scale mining projects, which will require energy and will reach13 426.66 of 19 KBOE by 2030. The energy eﬃciency and substitution by clean energy sources contemplated in Energies 2019, 12, x FOR PEER REVIEW 13 of 19 SCENARIO3 projects a lowerScenarios energy Energy demand Demand 325.10 Agriculture, KBOE. Fishing and Mining

1200 Scenarios Energy Demand Agriculture, Fishing and Mining

KBOE) 10001200

800 KBOE) 1000

600800

400600

200 Final energy demanda ( 400

2000 Final energy demanda (

2000 2005 2010 2015 2020 2025 2030

Gasolines LPG Non Energetic Figure 11. Scenarios demand final energy sector agriculture, fishing and mining. Figure 11. Scenarios demand final energy sector agriculture, fishing and mining. Figure 11. Scenarios demand final energy sector agriculture, fishing and mining. Figure 12 shows the simulation of energy demand in the construction sector, the three scenarios Figure 12 shows the simulation of energy demand in the construction sector, the three scenarios predict an increase in energy. Maintaining the current conditions of consumption and energy mix, a predictFigure an increase 12 shows in the energy. simulation Maintaining of energy the demand current in conditions the construction of consumption sector, the and three energy scenarios mix, demand of 17,639.21 KBOE would be forecast, on the other hand, national or global policies focused predicta demand an ofincrease 17,639.21 in energy. KBOE would Maintaining be forecast, the current on the otherconditions hand, of national consumption or global and policies energy focused mix, a on energy efficiency and replacement of fossil fuels would be launched, the projection to 2030 would demandon energy of e 17,639fficiency.21 andKBOE replacement would be offorecast, fossilfuels on the would other be hand, launched, nationa thel or projection global policies to 2030 focused would reach 16,175.35 KBOE for SCENARIO2 and 15,357.77 KBOE for SCENARIO3. onreach energy 16,175.35 efficiency KBOE and for replacement SCENARIO2 of and fossil 15,357.77 fuels would KBOE be for launched, SCENARIO3. the projection to 2030 would reach 16,175.35 KBOE for SCENARIO2 and 15,357.77 KBOE for SCENARIO3. Scenarios Energy Demand Construction 20000 Scenarios Energy Demand Construction 18000

KBOE) 1600020000 1400018000 KBOE) 1200016000 1000014000 120008000 100006000 40008000 Final energy demanda ( 20006000 40000

Final energy demanda ( 2000 BAU

2000 2005 2010 2015 2020 2025 2030

DieselFigure Oil 12. ScenariosElectricity demandFuel Oil finalGasolines energy constructionLPG Non sector. Energetic Figure 12. Scenarios demand final energy construction sector. An increase in CO emissions will continue to be observed if the country does not take urgent Figure2 12. Scenarios demand final energy construction sector. measuresAn increase on energy in CO consumption2 emissions and,will continue mainly, if to it be does observed not adopt if the the country use of more does enotfficient take and urgent less measurespolluting on energy. energy When consumption comparing and, the mainly, SCENARIO1 if it does and not SCENARIO3 adopt the use scenarios of more with efficient respect and to less the An increase in CO2 emissions will continue to be observed if the country does not take urgent polluting energy. When comparing the SCENARIO1 and SCENARIO3 scenarios with respect to the measuresSCENARIO1, on energy a significant consumption decrease and, in CO mainly,2 emissions if it does generated not adopt using the energy use of in more the di efficientfferent economic and less SCENARIO1, a significant decrease in CO2 emissions generated using energy in the different pollutingsectors of energy. Ecuador When is observed. comparing In the the case SCENARIO1 of SCENARIO2, and SCEN whereARIO a 23%3 scenarios reduction with is projected respect to from the economicthe 60,233.7 sectors KT CO of2 projected Ecuador for is observed.the year 2030 In in the the case BAU of scenario. SCENARIO This2 reduction, where a is 23% due reduction to the means is SCENARIO1, a significant decrease in CO2 emissions generated using energy in the different projected from the 60,233.7 KT CO2 projected for the year 2030 in the BAU scenario. This reduction is economicof energy substitution, sectors of Ecuador technology, is observed. energy e Inffi ciency the case and of changes SCENARIO in the2, energy where matrixa 23% reductionproposed in is due to the means of energy substitution, technology, energy efficiency and changes in the energy projected from the 60,233.7 KT CO2 projected for the year 2030 in the BAU scenario. This reduction is matrix proposed in government energy policies. SCENARIO3 is even more encouraging and projects due to the means of energy substitution, technology, energy efficiency and changes in the energy an increase of just 11.5% compared to 36,978.1 KT CO2 in 2016 (Figure 13). matrix proposed in government energy policies. SCENARIO3 is even more encouraging and projects an increase of just 11.5% compared to 36,978.1 KT CO2 in 2016 (Figure 13).

Energies 2020, 13, 3883 13 of 18 government energy policies. SCENARIO3 is even more encouraging and projects an increase of just Energies 2019, 12, x FOR PEER REVIEW 14 of 19 11.5% compared to 36,978.1 KT CO2 in 2016 (Figure 13).

65000 60000 55000

50000 2

45000 KT CO KT 40000 35000 30000 25000 20000 2000 2005 2010 2015 2020 2025 2030

SCENARIO1 SCENARIO2 SCENARIO3

Figure 13. Projection of CO2 emissions by total energy consumption. Figure 13. Projection of CO2 emissions by total energy consumption. 4. Discussion 4. Discussion Based on the results obtained from the simulation of the energy variables in the SCENARIO1, SCENARIO2Based on and the SCENARIO3 results obtained scenarios from for the the simulation year 2030, of energy the energy policies variables could be in established the SCENARIO1 that are, theSCENARIO pillar of sustainable2 and SCENARIO energy governance3 scenarios concernedfor the year with 2030, the energy reduction policies of emissions, could be the established improvement that ofare energy the pillar efficiency of sustainable and a sustained energy transition governance to renewable concerned energy. with The the three reduction scenarios of make emissions, it possible the toimprovement establish the of eff energyects of efficiency renewable and energies a sustained and energy transition policies to ren onewable energy energy. governance The three in Ecuador. scenarios makeThe it modern possible fossil to establish fuel economy the effects shows of characteristics renewable energies of a mature and socio-technical energy policies domain, on energy with agovernance tight integration in Ecuador between. the components of the hydrocarbon industry (exploration, extraction, transport,The modern combustion, fossil andfuel retailing)economy [shows63]. In characteristics reviewing the mainof a mature agreements, socio-technical policies and domain, reports with in thea tight area in oftegration energy governance between the in components the world, they of the conclude hydrocarbon that none industry of the current(exploration, forms extraction, of energy governancetransport, combustion, should leave and aside retail theing care) [63] of. In the reviewing environment the main and agreements, that there are policies many and challenges reports inin thethe energyarea of fieldenergy [64 governance]. A central in aspect the world, of the they issues conclude discussed that is none the observationof the current that forms both of politics energy andgovernance political should processes leave are aside at the the heart care of of governancethe environment for sustainable and that there development. are many challenges Climate change in the nowenergy aff ectsfield all [64] countries. A central on all aspect continents. of the Itissues is disrupting discussed national is the observation eco-economies that and both aff ectingpolitics lives, and whichpolitical is whyprocesses there isar ane at urgent the heart need of for governance global energy for sustainable policies toaddress development. climate Climate change, change geopolitical now tensionsaffects all and countries economic on vulnerability. all continents. Achieving It is disrupting a sustainable national energy eco-economies future requires and a affecting revolution lives, in thewhich energy is why system there [ 65is ].an urgent need for global energy policies to address climate change, geopolitical tensionsEnergy and is economic fundamental vulnerability. to all aspects Achieving of development, a sustainable but sustainable energy future energy requires is basic a torevolution improving in thethe healthenergy andsystem livelihoods [65]. of millions of people around the world, so there is an urgent need for progressEnergy on access is fundamental to sustainable to and all modern aspects energy of development, to support the but progress sustainable of nations energy [66 ].is Defining basic to energyimproving policies the alignedhealth and with livelihoods clean energy of use,millions greater of people energy around efficiency the and world, responsible so there consumption is an urgent isneed imperative for progress in the on eff accessort to to define sustainable sustainable and modern energy governance. energy to support the progress of nations [66]. DefiningAs an energy oil-exporting policies country, aligned Ecuadorwith clea hasn energy maintained use, greater a high levelenergy of dependenceefficiency and on responsible oil and its derivativesconsumption in is its imperative energy matrix, in the and effort the to economy define sustainable accounts forenergy a very governance significant. percentage of the country’sAs an total oil-exporting income. In country, recent years Ecuador it has has experienced maintained a a major high level change of independence energy, perhaps on oil dueand toits predictionsderivatives thatin its oil energy resources matrix, are and in a the phase economy of decline, accounts estimating for a very that significant reserves could percentage last between of the 25country and 30’s total years income. [67]. The In recent development years it ofhas renewable experienced energies a major has change focused in energy, on hydropower, perhaps due with to investmentpredictions inthat several oil resources hydroelectric are in projects.a phase of The decline, Latin Americanestimating Energy that reserve Organizations could last (OLADE) between has 25 determinedand 30 years that [67] Ecuador’s. The development water potential of is renewable approximately energies 22,520 has MW. focused on hydropower, with investment in several hydroelectric projects. The Latin American Energy Organization (OLADE) has determined that Ecuador’s water potential is approximately 22,520 MW. From the high dependence on fossil fuels to an almost complete self-sufficiency through renewable energies is the main challenge of the government, policies are needed to encourage the development of new technologies focused on non-conventional clean energy sources such as solar energy, wind energy, biofuels among others. It is important to have guidelines that allow for

Energies 2020, 13, 3883 14 of 18

From the high dependence on fossil fuels to an almost complete self-sufficiency through renewable energies is the main challenge of the government, policies are needed to encourage the development of new technologies focused on non-conventional clean energy sources such as solar energy, wind energy, biofuels among others. It is important to have guidelines that allow for infrastructure projects that guarantee the supply of energy while meeting high quality standards. Renewable energy promises to play an important role in reducing the generation and consumption of high-carbon energy sources [68]. The timely transition to a low carbon and renewable energy economy is key to mitigating climate change. Climate policies targeting energy-related CO2 emissions can result in short-term localized reductions in both air pollution and adverse impacts on human health [69]. Increase in the use of renewable energy would discourage the use of fossil fuel consumption and thereby mitigate carbon emissions [70]. Ref. [70] investigated the environmental impact of carbon emission mitigation to achieve sustainable economic growth, the study finds a long-term positive equilibrium relationship between renewable energy consumption and economic growth. Research has determined that there is an important relationship between the use of renewable energy and the economic growth of a country. The promotion of mechanisms for adopting the use of renewable energies fosters and stimulates the economic and sustainable growth of nations. Energy efficiency in Ecuador plays an important role in energy planning. The adoption of energy efficiency schemes within the energy matrix will minimize energy consumption and reduce the carbon footprint. In Ecuador, sectors such as transport and industry have maintained a tendency to consume more fossil energy, producing a greater amount of CO2 emissions. By taking into account the scenarios that propose the substitution of the energy mix and greater energy efficiency, a decrease in energy demand would be projected and a significant reduction in CO2 emissions would be achieved compared to the scenario that projects 60,233.7 KT of CO2 emissions if we continue as we have been acting. Furthermore, understanding the relationship between CO2 emissions and economic growth would be useful for formulating energy policies and promoting the sustainable development of energy resources [71]. The significant increase in energy consumption in Ecuador has negatively affected the country’s financial position, because large subsidies have been granted to energy consumption in the domestic market, and because Ecuador is an exporter of crude oil and an importer of oil derivatives. A scenario of economic growth would favor investments in scientific research that could lead to the development of new technologies related to the mitigation of CO2 emissions; therefore, greater economic activity would have a positive impact on the environment. Economic projections do not predict an encouraging scenario and therefore, at present, they would not be a preponderant factor in reducing emissions, so policies that improve the quality of life of Ecuadorians are necessary.

5. Conclusions The scenario simulation considers the importance of a change in the energy matrix in Ecuador. Incorporating clean energy, mainly hydroelectric energy, considering the country’s water potential is one of the priorities that must be considered in national energy policies. Increasing the participation of renewable energies in the national energy matrix plays a fundamental role in reducing CO2 emissions. For the development of renewable energy, it is important to change the current energy landscape. Energy policies must be redesigned to promote research, implementation and use of renewable energy in the diﬀerent economic sectors of Ecuador. In the case of the transport sector, a change in its energy mix is needed. Transportation would be one of the sectors with the most CO2 emissions and the highest energy demand by 2030 if corrective measures are not taken and current conditions are maintained. Projects such as the Metro in Quito, the Tram in Cuenca, the airway in Guayaquil, the replacement of urban transport buses by electric buses and the promotion of sustainable mobility projects would be the beginning of a decarbonization for this sector. Energies 2020, 13, 3883 15 of 18

Considering that fossil fuels are the main source of energy consumption in Ecuador, it is necessary to propose policies and strategies that promote their rational use. Energy efficiency plays an important role in competitiveness and social aspects and is one of the most effective ways of addressing climate change. The energy required to produce a production unit is high in Ecuador. Sectors such as transport and industry have maintained the trend towards consuming more fossil-fueled energy, resulting in higher emissions and greater energy demand. Considering the CO2 emission scenarios, it is clearly observed that by achieving a greater participation of renewable energies and an improvement in energy efficiency, future emissions in Ecuador could be considerably reduced. For the next few years, Ecuador’s energy policies need to consider an economic recovery. Greater investment in innovation and technological development would have a positive impact on the environment. The application of more efficient technologies in energy production, the replacement of fossil fuels with clean energy and the establishment of policies focused on climate change could favor sustainable economic growth.

Author Contributions: Investigation F.R.A.M.; conceptualization, F.R.A.M. and L.J.M.; methodology, F.R.A.M. and L.J.M.; software, F.R.A.M. and L.J.M.; writing—original draft preparation F.R.A.M.; writing—review and editing F.R.A.M. and L.J.M.; supervision L.J.M.; validation L.J.M. All authors have read and agreed to the published version of the manuscript. Funding: This research was funded by Group of Energy, Economy and System Dynamics (GEEDS) of the University of Valladolid. The authors are members of the Network MENTES (project reference RED2018-102794) funded by the Ministry of Science and Innovation. Conﬂicts of Interest: The authors declare no conﬂict of interest

Abbreviations The following abbreviations are used in this manuscript:

BAU Business as Usual BOE Barrel of oil equivalent CDM Clean Development Mechanism CONELEC National Electricity Council GDP Gross domestic product GHG Greenhouse gas IEA International Energy Agency IPCC Intergovernmental Panel on Climate Change LGP Liquid petroleum gas SD System Dynamics USD US Dollar SCERARIO1 The Business as Usual SCENARIO2 The National Policies SCENARIO3 Global policies and trends

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