Ecuador needs to incorporate new generation capacity and has already put a figure on the table, with a volume that aims to cover a good part of the deficit that the national electricity system is currently facing.
“We have a goal of injecting 1250 MW, we must do it. That is the gap we really have within the next two years,” confirmed Marco Salao , Undersecretary of Distribution and Marketing of Electric Energy of Ecuador, in dialogue with Energía Estratégica.
The definition takes on added relevance in a challenging context for the sector. Between October and December 2024, Ecuador experienced blackouts of up to 14 hours per day, affecting homes, industries, and businesses. Currently, the generation deficit is around 1000 MW , while demand continues to grow by 200 to 300 MW per year .
To accelerate the addition of capacity, the government is banking on greater private sector participation. The plan includes new regulations for renewable energy projects of varying scales and the creation of a trust fund to address one of the main demands historically made by investors.
“The goal is that by November of this year, all of our profit collection will be channeled through the trust. This provides legal certainty to private investors, guaranteeing the return and payment of their investment,” Salao stated.
“We have 1250 MW that we must inject through renewable energy sources. That is why the regulatory framework exists. Especially in the public selection processes, which have been stalled due to legal certainty issues, but from now on they will be in place and will be carried out through the trust,” he insisted.
The tool aims to guarantee the flow of payments within the electricity sector and provide predictability to developers interested in entering the Ecuadorian market.
Furthermore, the initiative is part of a broader strategy to incorporate private capital into a sector that for decades was dominated by the State, including a regulation that enables projects of up to 10 MW and another that expands the scheme for initiatives between 10 and 100 MW, with defined tariffs to incentivize private capital.
In recent months, rumors have even surfaced about a possible call for bids to add up to 2,100 MW through new electricity projects, with a significant contribution from photovoltaic solar technology. However, it should be noted that this initiative has not been officially confirmed.
Likewise, the market was already showing signs of activity in the commercial and industrial segments. In fact, in recent years, Ecuadorian companies developed nearly 100 rooftop solar projects for industrial buildings, primarily ranging from 1 to 3 MW, a sign that the productive sector was beginning to seek its own solutions to the energy crisis.
Ecuador also seeks to reduce losses equivalent to 5100 GWh per year
While the incorporation of new generation power is progressing, the country faces another structural challenge related to the efficiency of the electrical grids.
Currently, system losses "reach 15.86% , equivalent to approximately 5100 GWh per year," a figure that the Government intends to reduce through projects developed together with the Inter-American Development Bank (IDB).
In parallel, the government is seeking to consolidate conditions that will attract new players to the market. The reduction of country risk and the existence of mechanisms designed to guarantee returns are among the arguments the administration considers central to attracting investment.
“We must ensure the confidence of private investment. And that is also measured by a parameter such as country risk, which we have reduced with Ecuador. Confidence, as indicated by the country risk indicator, has decreased. And the financial instruments that allow private investors to recoup their investment are defined. So, well, we encourage private investors to come to the country and help strengthen it ,” he concluded.