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Ecuador

With a cumulative score of 1.33, Ecuador ranks number 72 among emerging markets and number 101 in the global ranking.

  • Emerging markets
  • Americas

1.60 / 5

Power score


1.00 / 5

Transport score


0.83 / 5

Buildings score



Compare

Low-carbon strategy

Net-zero goal and strategy

5% biodiesel blending mandate with conventional diesel.

Nationally Determined Contributions (NDC)

Ecuador's NDC has a BAU target which covers all sectors.

Fossil fuel phase-out policy

There is no fossil fuel phase-out policy in Ecuador.

Power

Power policy

Ecuador has a clear target for renewables, The National Plan for Good Living 2013-2022, establishes the target of reaching 60% renewable energy generation capacity by 2017. The objective of this national plan lays special emphasis on hydropower and bioenergy. The Electrification Master Plan 2013-2022 calls for 25 hydropower projects totaling 4.2 GW of capacity by 2022 as well as an additional 217MW of solar, wind and other renewables.

The government also launched a tender for solar-plus-storage in the Galapagos Islands, aiming to reduce reliance on diesel generation. It scheduled a renewable auction in 2019, however it was postponed. In March 2020, the Ministry of Energy and Renewable Energy launched another tender of a PV-plus-storage project of 14.8MW/40.9MWh to be built in the Galapagos Islands.

Power policies

Renewable energy auction
Feed-in Tariff
Import tax incentives
Net Metering
Renewable energy target
VAT incentives

Power prices and costs

Commercial and residential retail power prices slightly increased in 2020 compared to 2018. The 2020 tariffs were $104.40/MWh for commercial and $102.80/MWh for residential, compared to $103.90/MWh (commercial) and $101.50/MWh (residential) in 2018. Industrial tariffs decreased $0.20/MWh, from $80.10 in 2018 to $79.90/MWh in 2020.

Investment in clean energy in Ecuador has been limited. From 2011 to 2017, the total invested was $489 million, mainly in small hydro assets. In 2018, the country did not receive any investment. In 2019, it attracted $100 million for wind projects. Development banks Inter-American Investment Corporation and Corporación Andina de Fomento (CAF) are the biggest lead arrangers in the country, mainly investing in small hydro.

In Ecuador, prices for gasoline, diesel, liquefied petroleum gas (LPG), and electricity have been subsidized since the 1970s by up to 85%.

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Power market

In Ecuador, the Ministry of Electricity and Renewable Energy (MEER) oversees renewable energy policy and planning. In 2015, the Act Establishing the Public Electric Power Service (LOSPEE) was published, overseeing the power sector in Ecuador. Under this law, the National Electricity Board (CONELEC) becomes the Agency for Regulation and Control of Electricity (ARCONEL). However, in May 2020, Decree 1036 established the merger of the Agencia de Regulación y Control de Hidrocarburos, the Agencia de Regulación y Control Minero and the ARCONEL under the Agencia de Regulación y Control de Energía y Recursos Naturales no Renovables (ARCERNNR).

While generation is open to private players in Ecuador, transmission is under the responsibility of state-owned utility Corporación Eléctrica del Ecuador (CELEC EP Transelectric). Distribution is divided among 11 majority-public companies, in which MEER is the majority shareholder.

Consumers can't buy electricity from a provider of their choice; they must obtain power from one of the approximately 20 distribution companies that serves their country.

Installed Capacity (in MW)

2012201420162018202002K4K6K8K MW

Electricity Generation (in GWh)

20122014201620182020010K20K30K GWh
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Utility privatisation

Which segments of the power sector are open to private participation?


Generation
Transmission
Retail

Wholesale power market

Does the country have a wholesale power market?


Available
Not available

Doing business and barriers

Ecuador faces barriers to the deployment of more renewable generation due to characteristics of its power market. A combination of very low electricity tariffs, fossil fuel subsidies for electricity generation and low power demand growth produces a challenging environment for project developers. The country is able to meet peak power demand from its hydro capacity alone.

Currency of PPAs

Are PPAs signed in or indexed to U.S. Dollars or Euro?


Available
Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?


Available
Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?


Available
Not available

Fossil fuel taxes

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes?


Available
Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?


Available
Not available

Fossil fuel subsidies

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?


Available
Not available

Transport

EV market

Ecuador, through Resolution No. 016-2019, reduced to zero the import duty on electric vehicles for private use, public transport and cargo, batteries and chargers, harmonizing with the tax benefits of the Organic Law for Productive Development.

EV policy

The government has yet to implement any substantive policy support in this sector and the EV market remains at an early stage.

Transport policies

Electric vehicle target
Electric vehicle purchase grant or loan incentive
VAT incentives for EV
Import tax incentives for EV
EV charging infrastructure target
EV charging infrastructure support

Fuel economy standards

Does the country have a fuel economy standard in place?


Available
Not available

Buildings

Buildings market

The government has yet to implement any substantive policy support in this sector and the buildings market remains at an early stage.

Energy efficiency plan

Does the country have a national energy efficiency plan?


Available
Not available

Energy performance standards

Are there minimum energy performance standards for buildings?


Available
Not available

Buildings policy

Ecuador has a public policy that seeks to improve efficiency in sectors related to the provision and use of energy. With the implementation of this policy, Ecuador will comply with international initiatives aimed at "guaranteeing access to affordable, safe, sustainable and modern energy", a goal established by the United Nations in the seventh Sustainable Development Goal.

Buildings policies

Low-carbon heat target/roadmap
Tax credits
Boiler scrappage schemes
Heat pumps purchase grants/loans incentive
Ban on boilers: new build homes
Ban on boilers: all homes

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