Energy analyst calls for streamlined electricity law in Bolivia as government’s draft faces timeline concerns

The Ministry of Hydrocarbons and Energy has circulated a draft electricity law that incorporates renewable energy provisions while retaining much of the existing legal framework. However, the document’s complexity raises concerns about approval timelines, with the legislative process and subsequent regulatory development potentially extending through the end of 2027. This timeframe conflicts with the urgent need to address declining natural gas production and expand renewable generation capacity before the anticipated 2028 power shortage.

Arnez proposes a condensed legislative framework centered on energy auctions, a mechanism that would allow private investors to secure government commitments years in advance of project commissioning. The competitive bidding process would enable the state to select the most efficient and cost-effective projects while accelerating the deployment of solar, wind, and hydroelectric capacity. The analyst emphasizes that investment decisions require immediate action rather than prolonged regulatory processes.

The current electricity system operates under heavily subsidized natural gas pricing for power generation, a model that remains viable only with domestically produced gas sold below market rates. The subsidy structure becomes unsustainable when Bolivia must import natural gas, forcing either tariff increases or fiscal strain. Arnez warns that raising gas prices without simultaneously developing renewable sources would directly impact electricity rates, while new generation projects typically require one to three years to reach commercial operation.

The legislative socialization process should incorporate input from companies, technical institutions, and specialized professionals to construct balanced and functional regulation based on technical criteria rather than particular interests, according to Arnez. He attributes the current energy crisis to previous administrations’ investment decisions, noting that resources were directed toward non-productive projects while neglecting necessary energy sector development.

The state utility ENDE has prioritized international interconnection projects, including an expensive link with Brazil that would import power at rates higher than domestic generation costs. Arnez acknowledges ENDE’s technical capacity while questioning political influence that shaped project selection in prior governments. The recommendation centers on strengthening domestic generation, particularly renewable resources, rather than relying on cross-border electricity imports.