The details behind Ecuador's US$2.4bn energy expansion plan

Ecuador has outlined an ambitious target for new hydroelectric, solar, wind and geothermal capacity – in addition to proposed nuclear energy investments – as part of its 2025-2030 electric power expansion plan.

The project portfolio includes 23 developments totaling 1,471MW that are earmarked to be built via strategic alliances with private companies. Investment in these developments is expected to reach US$2.43bn.

Solar accounts for the largest share of projects, with eight, followed hydropower (2), wind (1) and geothermal (1).  There are also 11 transmission developments included in the plan.

Solar developments are seen reaching 963MW with expected investment of US$913mn.

Among these projects, the largest are La Ceiba (200MW, US$170mn); Flotante Mazar (159MW, US$160mn); Ilapo (153MW, US$147mn); and San Miguel Ambuquí (127MW, US$125mn).

The plan's goal is to achieve an energy mix based on several alternative sources so that the country does not depend solely on hydroelectric plants, mines and energy ministry Inés Manzano said during a presentation to businessmen, investors, diplomats, representatives of multilateral organizations and state entities.

The plan also includes the implementation of nuclear energy, starting with a 300MW modular reactor and, in the longer term, a 1GW plant, which would have a useful life of 40 years.

The 2025-2030 electricity plan also includes legal and regulatory changes to establish a framework that promotes efficiency and competitiveness.

“We must be quick and effective in finding solutions. We are working on a new legal, regulatory and institutional framework, on the reconfiguration of the electricity sector, market development models, among other aspects. There is a range of opportunities that will be developed in the coming months,” deputy energy minister Fabián Calero told reporters.

According to the 2022-2032 electrification master plan, the Ecuadorian electricity sector requires private investment of more than US$17bn by 2032.

Of this amount, the generation segment would require investments of US$9.95bn – including new projects – transmission US$1.75bn and distribution US$5.65bn.

Experts say that to meet these needs, Ecuador most open up generation, transmission and distribution to all forms of investment: public, private and mixed.

A first step is to create a wholesale power market given that Ecuador's government currently sets the price of electricity and maintains subsidized prices.

"To comply with the 2025-2030 plan, institutional strength is required to successfully carry out public processes that attract private investment. It is essential to undertake urgent reforms," energy consultant Ricardo Buitrón told BNamericas.