Paraguay is discussing a new architecture to regulate its energy market. In contrast to the Energy Regulatory Entity (ERE) proposed by the Vice Ministry of Mines and Energy (VMME), a sectoral proposal advocates for an agency with five directors, specialized profiles, and greater checks and balances on appointments made by the Executive Branch.
“The idea is for the regulatory body to be independent of the particular interests of all institutions linked to the energy sector in Paraguay,” said Francisco Escudero, a consulting engineer on energy issues and projects and a member of the Paraguayan Institute of Professionals of the Electric Sector (IPPSE), who prepared a sectoral proposal.
“Establishing a whole new structure takes time to work, to actually produce results,” he added.
The change comes at a critical time for system planning. Demand is approaching the available supply from the binational power plants over the next five years , while almost 1.3 GW of firm cryptocurrency mining contracts remain in effect until December 31, 2027.
Added to that volume are requests for data centers and ventures in green hydrogen, ammonia, green fertilizers and e-fuels, so orders far exceed the supply available in the coming years .
In fact, the shared estimates indicate that Paraguay could need up to an additional 800 MW to meet consumption and accommodate new industrial projects. ANDE, for its part, anticipates an expansion of 400 to 500 MW per year and is seeking to launch successive calls for bids to add renewable capacity.
The institutional discussion gained momentum within the electricity sub-committee convened by the Government, where two projects were introduced: the creation of the Ministry of Energy, Mines and Hydrocarbons and the formation of the new regulatory body .
The official draft envisions an autonomous and self-governing body headed by three full members and three alternates . Candidates would be selected through a public competitive examination, with shortlists of three candidates and subsequent appointment by the President of the Republic by decree.
“The project itself establishes that the Executive Branch will appoint a list of three directors to govern the Regulatory Entity. And there it is already clear that there is no independence, but rather interference from the Executive Branch,” the specialist argued.
The alternative, called the Paraguayan Energy Regulatory Entity (EREP) , expands the board to five members and establishes profiles for management, networks and service quality, tariffs and finance, legal regulation and a multidisciplinary specialty, with a minimum of 15 years of experience .
The selection process would begin with a national competition and a skills assessment conducted by an independent commission. The shortlists would be made public, and the presidential appointment would require Senate approval .
The terms of office also differ. The VMME text establishes six years , with staggered renewal of one member every two years and the possibility of reelection. The alternative scheme proposes five years and replacements independent of the presidential term.
Likewise, the operational structure also changes. The official workforce reduction plan would have four management divisions: Electricity and Renewables; Hydrocarbons, Gases and Hydrogen; Biomass and Biofuels; and Quality and User Protection.
The EREP would be organized through three superintendencies , corresponding to Electricity, Hydrocarbons and Fuels, and Renewable Energies and New Technologies, accompanied by five cross-cutting directorates for tariffs and markets, legal affairs, user protection, regulatory studies and auditing and transparency.
ANDE and Petropar would be excluded from any decision-making instance with voting rights due to their status as agents subject to oversight, although they could intervene technically.
The proposal includes a National Energy Advisory Council of around 15 members from academia, public agencies, companies, and civil society, with a voice but no decision-making power. “ Because the sectors will have their own interests ,” the IPPSE member pointed out.
The new framework is being discussed after other attempts to reorganize energy institutions. Last year, the Executive Branch sought to transfer the Vice Ministry of Mines and Energy, currently under the Ministry of Public Works and Communications, to the Ministry of Industry and Commerce, but the initiative did not succeed.
In addition , five decrees related to tariff policies for new industries, including converged consumers and Power-to-X, were issued this year . The first four were ultimately repealed following objections from trade associations, ANDE (the National Electricity Administration), civil society, and other stakeholders.
The regulatory redesign, however, will have medium- and long-term effects and does not replace the need to incorporate power .
Tenders running parallel to the reform
One of the first projects designed to meet the growing demand is the 140 MW utility-scale solar power plant in Loma Plata , in the Central Chaco region. Its construction and electromechanical assembly are projected to take place between 2027 and 2028, with commercial operation expected to begin in 2029.
The contract would last a maximum of 30 years , including one and a half years of construction, 27 years of operation and maintenance, and six months for dismantling.
Therefore, for the interviewee, the immediate challenge is to execute the existing expansion plans while building the new institutional framework: “The urgency is that the sectoral plans exist, there is a need to add generation, there is a need to diversify the matrix, these plans are made and urgent decisions must be made.”
The strategy involves taking advantage of the new legal frameworks to move forward with international public tenders for non-conventional renewables, hydroelectric power and even thermal generation , without waiting for the entire reorganization process to be completed.
The specialist proposes “starting a fast-track program, establishing an executive committee to coordinate, to work in parallel, to establish a short, medium, and long-term roadmap” and launching the calls for proposals while the regulatory work continues.
The addition of new capacity will also expand the number of participants. In addition to large consumers, the market could include independent power producers, self-generators, cogeneration plants, exporters, and developers awarded contracts through ANDE tenders .
This scenario reinforces the need to separate regulatory functions from the interests of public and private operators and political power itself, but without postponing the investment decisions required by the system.
“Because the government believes that with this structuring it solves the problem of a possible energy crisis that may occur in the next five years, and we at IPSE believe that we must first address what is urgent,” Escudero emphasized.
“Since there are plans, let’s implement them as quickly as possible and, in parallel, work on restructuring and modernizing the Paraguayan electricity and energy regulatory sector in general,” he concluded.