Ecuador has continued to expand use of hydroelectric power
Hydropower has played a key and growing role in Ecuador’s electricity mix by displacing fossil fuels and helping meet higher domestic electricity demand. In 2011, hydroelectric power accounted for 55% of the country’s electricity mix, and electricity from fossil fuels accounted for 43%. In 2021, hydropower produced 79% of Ecuador’s electricity, and fossil fuels produced less than 20%.
Ecuador’s mountainous terrain and numerous rivers are conducive for hydropower. The Coca Codo Sinclair Hydroelectric Plant, located on the Coca River, is Ecuador's largest hydroelectric facility with 1,500 megawatts (MW) of capacity. The plant went into full operation in 2016 and is critical to meeting the country's electricity demand. Since its commissioning, the hydroelectric plant has been undergoing repairs because of erosion from the Coca River, and it has run into complications that prevent it from operating at full capacity.
Because of its reliance on hydropower, Ecuador’s electricity sector is vulnerable to droughts and low water levels during the dry season from October to March. To supplement hydropower, Ecuador relies on oil-fired power plants for generation. The government is committed to converting old oil-fired power plants to natural gas. Although natural gas-fired generation has the potential to become a stable complement to drought- and erosion-prone hydropower, Ecuador's lack of domestic natural gas supplies prevents natural gas capacity expansion in the short term. In 2022, Ecuador imported 2 million cubic feet of liquefied natural gas (LNG). The cargo from Panama was Ecuador's first import of LNG in its history. The imported volume was used to replace 14,000 gallons of diesel for industrial processes, according to Ecuador’s government.
Aside from hydropower and fossil fuel-fired generation, Ecuador’s remaining electricity in 2021 was generated by non-hydro renewables, including wind, solar, and biomass. The use of wind, solar, and biomass for electric power generation in Ecuador is still in the early stages. In 2021, wind farms accounted for 0.2% of total electricity generation, solar accounted for 0.1%, and biomass accounted for 1.3%. In Ecuador, biomass is primarily produced from sugar cane, African palm, and rice husks.
Ecuador’s government released the Electricity Master Plan 2019, which outlines a series of planned projects to meet the country's electricity demand and encourage private investment. In 2021, Ecuador had 5.3 gigawatts (GW) of renewable energy capacity. The plan’s goals include adding approximately 1.4 GW of new renewable energy capacity to the national grid by 2031.
To help realize that goal, the government is offering a 100% income tax exemption for certain new investments in renewable energy. Planned projects include two new wind farms (Villonaco II & III) with a combined capacity of 165 MW in Loja, Ecuador. In southern Ecuador, the planned 200 MW El Aromo solar farm will be Ecuador’s largest solar project once completed.
The country's largest-capacity operating wind farm, Huascachaca Wind Farm, came online in 2023. The 50 MW onshore wind farm is expected to generate about 130 gigawatthours of electricity per year.
You can find more information about Ecuador’s energy sector in our recently updated Country Analysis Brief: Ecuador.
Principal contributor: Matias Arnal