In 2011, Ecuador's electricity generation was derived 55% from hydroelectric sources and 43% from fossil fuels. Fast forward to 2021, and hydropower surged to account for a remarkable 79% of Ecuador's electricity production, while fossil fuels dwindled to less than 20%.
Ecuador's mountainous terrain, abundant rivers, and cascading waterways provide the ideal setting for hydropower generation. At the forefront of this transition is the 1.5 GW Coca Codo Sinclair Hydroelectric Plant, situated on the Coca River. Commissioned in 2016, it stands as the country's largest hydropower facility, playing a pivotal role in meeting Ecuador's surging electricity demand. However, challenges have emerged since its inauguration, primarily stemming from erosion caused by the Coca River, leading to operational limitations and ongoing repairs.
While hydropower has become a dominant force, Ecuador's electricity sector faces vulnerability during droughts and periods of low water levels, typically occurring during the dry season from October to March. To offset these challenges, Ecuador relies on oil-fired power plants. In a bid to bolster stability, the government is committed to transitioning old oil-fired facilities to natural gas, offering a reliable alternative to the hydropower's susceptibility to droughts and erosion. However, the absence of domestic natural gas supplies hampers immediate expansion efforts. In a notable development, Ecuador's first-ever import of liquefied natural gas (LNG), amounting to 2 million cubic feet from Panama in 2022, was employed to replace 14,000 gallons of diesel for industrial processes, as confirmed by the government.
In addition to hydropower, Ecuador's electricity mix in 2021 included contributions from non-hydro renewables, such as wind, solar, and biomass. However, their utilization in power generation remains in its nascent stages, with wind farms accounting for 0.2% of total electricity generation, solar at 0.1%, and biomass at 1.3%. Biomass sources primarily include sugar cane, African palm, and rice husks.
The government's 2019 Electricity Master Plan outlines a series of strategic initiatives aimed at meeting the country's burgeoning electricity needs and fostering private investment. In 2021, Ecuador boasted 5.3 GW of renewable energy capacity, with plans to introduce approximately 1.4 GW of additional renewable energy capacity to the national grid by 2031. To incentivize such growth, the government is offering a 100% income tax exemption for select investments in renewable energy. Notable projects on the horizon include two new wind farms, Villonaco II & III, with a combined capacity of 165 MW in Loja, Ecuador, as well as the ambitious 200 MW El Aromo solar farm, set to become the country's largest solar project upon completion.
In a recent development, the National Center for Energy Control (CENACE) announced that the 49 MW Sarapullo Hydroelectric Power Plant in Ecuador had commenced commercial operations in March 2023, further underlining the nation's commitment to enhancing its energy infrastructure.