Energy profile: Ecuador

From Global Energy Monitor

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This page is part of Global Energy Monitor's Latin America Energy Portal.
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Fuel mix (fossil fuels vs renewables)

Ecuador derives the vast majority of its energy supply from oil, particularly in the transport and industrial sectors.[1]

Hydro power is also a key energy source, accounting for more than 62% of installed electrical capacity and nearly 78% of electricity generation in 2020, with fossil fuels providing most of the remainder. Other renewables such as biomass, wind and solar play much smaller roles in Ecuador's electrical mix.[1][2][3]

Ecuador's Plan Nacional de Eficiencia Energética 2016-2035 aims to promote energy efficiency and the development of renewables.[4][5] In October 2020, Ecuador joined the EITI (Extractive Industries Transparency Initiative) to promote accountability and be more transparent regarding their natural resources and earned revenue.[6][7]

Greenhouse gas emissions targets

Ecuador's greenhouse gas emission target for 2025 calls for a reduction of 20.9% relative to Business As Usual emissions.[8][9] In 2019, the Green Climate Fund awarded US$ 18.5 million to Ecuador in recognition of the country's efforts to reduce deforestation and associated GHG emissions.[10]

Government energy agencies & other key players

National energy ministry

MERNNR (Ministerio de Energía y Recursos Naturales No Renovables) is responsible for the non-renewable energy resources and mines in Ecuador.

Permitting agencies

Environmental licenses must be obtained from Ecuador's Ministerio del Ambiente y Agua (Ministry of Environment and Water). If any water sources could potentially be impacted, a second license must be granted. Community consultation with local indigenous groups is also required.[11][12]

Mining permits in Ecuador are assigned by the MERNNR, but the mining registry has been temporarily closed since 2018, accordingly, new companies can only gain access through the transfer of an existing permit, which must be approved by the MERNNR.[12]

Regulatory agencies

The state administrator ARCERNNR (Agencia de Regulación y Control de Energía y Recursos Naturales no Renovables) is in charge of surveillance, auditing, intervention, and control of energy projects and mining operations.[12]

Electric utilities

MEER (Ministerio de Electricidad y Energía Renovable) is responsible for the development and dispersal of electricity throughout Ecuador, with an emphasis on renewable resources.[13]

National oil company

EP Petroecuador (Empresa Estatal Petróleos del Ecuador) is Ecuador's national oil company, focusing on transportation, refinement, storage, national & international commercialization, as well as price and quality control of oil.[14]

Other key players

The Ecuadorian State has mining exploration and exploitation priority which it carries out via the national mining company ENAMI (Empresa Nacional Minera).[12]

Corporación Eléctrica del Ecuador (CELEC EP) is the big player in the Ecuador's power sector and they increased their capacity annually between 2010-2020 growing from 2.5 GW to 6.36 GW.[15]

Energy sector employment data

As of 2017, 18.4% of Ecuadorians worked in the industry sector (defined as mining, manufacturing, energy production, and construction).[16] Capital-intensive sectors such as oil and energy continue to see economic growth in Ecuador.[17]

Electricity usage

Installed capacity

Electricity generation by fuel type during 2016 in Ecuador, source: EIA

As of 2020, Ecuador had 8096 MW of installed electrical capacity, derived almost entirely from hydro (62.55%) and fossil fuels (35.08%). Additional small contributions came from solar (0.34%), wind (0.26%) and other renewable sources such as biomass and biogas (1.77%).[1]

Production

Ecuador produced 31.2 TWh of electricity in 2020, mostly from hydroelectric (77.87%) and fossil fuel-fired power plants (20.26%).[1]

Ecuador's Plan Maestro de Electricidad 2016-2025 aims to optimize the use of power generation resources - notably those from renewable sources - by encouraging efficient use, energy savings, and reliable high quality service, as well as by extending the national interconnected system and the Galapagos electrical sector.[18]

Demand

Ecuador has the potential to provide the entire country with completely self-produced energy. Ecuador currently supplies 117% of its own usage needs and continues to trade energy resources with other countries.[19]

Consumption

As of 2016, Ecuador was consuming 22.68 billion kWh of electricity.[20]

In 2022, Ecuador partnered with the International Development Bank to improve the management of the national electrical grid.[21]

Coal in Ecuador

Ecuador produces no coal, and has no new proposed coal sources or projects.[22] The country ranks 114th in the world for coal consumption.[22] Ecuador must import all of the coal it uses. In 2018, Ecuador imported 17,000 short tons of coal.[23]

Oil & Natural Gas in Ecuador

Domestic Production

Almost all of Ecuador's 8.3 billion barrels of crude oil reserves are located in the Oriente Basin within the Amazon.[24] Nearly 85% of Ecuador's total energy supply comes from oil and natural gas.[5] In 2018, Ecuador was producing 517,000 bbl/day.[20] Natural gas continues to be important for maintaining a reliable and flexible power grid and is set to grow despite Ecuador's lack of infrastructure for capture and marketing of its own natural gas.[25]

In September 2021, the Ecuadorian government said it would grant concessions for private companies to built and operate power generations projects within the oil sector.[26]

Consumption

Total primary energy consumption in Ecuador by type (2016), source: EIA

As of 2016, Ecuador was consuming 265,000 bbl/day of refined petroleum products.[20] As of 2017, Ecuador was consuming 453.1 million cu m of natural gas.[20]

In 2020, petroleum and other liquids represented 62% of the total energy consumption of Ecuador.[27]

Exports and imports

Ecuador exports approximately 70% of its crude oil.[24] The United States, Chile, Peru, and China are the primary importers of Ecuadorian oil.[24] Ecuador was a member of OPEC (Organization of the Petroleum Exporting Countries) until January 2020.[28]

Petroecuador is largely responsible for importation of oil and natural gas. It imports small amounts of LNG.[29] In September 2020, the Ecuadorian government began to allow private companies to import some fuels for industrial and commercial use.[30]

Proposed new sources & projects

New oil and natural gas projects in Ecuador have been met with extensive resistance from local communities, especially indigenous groups.[31] The Ecuadorian court system has administered court orders to end projects found to be in violation of a healthy environment and human rights.[32]

In September 2021, a new natural gas power plant of 400 MW and a new transmission line to connect the oil industry to the national grid were announced by the Ecuadorian government with the projects intended to start operations between 2024-2026.[26]

Transport

Ecuador's crude oil exports (thousand barrels per day) by destination in 2016, source: EIA

The SOTE (Sistema Oleducto Trans-Ecuatoriano) and OCP (Oleoducto de Crudos Pesados) are Ecuador's two major crude oil pipeline systems; both are old and not used to their full capacity.[24]

Renewable Energy in Ecuador

As of 2021, wind and solar development in Ecuador is still largely in the planning phase; however, the Ecuadorian government intends to move forward with wind and solar projects in the coming years.[25] By 2030, hydropower is still expected to be Ecuador's largest source of renewable energy, despite backlash about the erosion of freshwater riverbeds and other concerns related to water resources development.[25]

In September 2021, Ecuador announced renewable auctions for November 2021 with a plan to have all selected projects operational by 2024.[33] Renewable project construction will have to account for flora, fauna, and indigenous rights in order to be successful in moving the country towards greener forms of energy production.[34] The first geothermal plant in the country is planned to be 50MW and begin operating in 2026.[35]

© 2020 The World Bank, Source: Global Solar Atlas 2.0, Solar resource data: Solargis.

In early 2022, Ecuador was beginning to sort through the companies interested in being part of a new 500 MW renewable energy bloc.[36][37][38]

Iron & Steel in Ecuador

Steel production in Ecuador between April-December 2020 in thousand tonnes, source: TradingEconomics

Ecuador is responsible for approximately 1% of the Latin American steel market.[39] Ecuador's iron ore deposits are estimated to be large, but the country's copper, gold and silver mines draw more attention.[40] Ecuador's main steel manufacturer is Adelca, which is noted for recycling metal to make products for the construction sector as opposed to importing them. Use of electric arc furnace (EAF) technology has saved on water, energy, waste, air emissions, and water pollution.[39]

Environmental & social impacts of energy in Ecuador

Protest to the opposition of mining in Quimsacocha held in the canton on Girón, source: Mongabay

Ecuador suffered one of its worst energy-related environmental disasters in April 2020, when a pair of ruptured pipelines spilled 672,000 gallons of petroleum products into the Coca and Napo Rivers, affecting food and water supplies for 105 communities in the Ecuadorian Amazon and prompting ongoing protests.[41] Mining projects in Ecuador are frequently met with strife and protests from indigenous communities regarding environmental impacts and the relatively small number of jobs created for locals.[42] Human rights violations, forced evictions, property destruction, arrests, harassments, and murder are some of the threats faced by environmental activists in Ecuador.[43] The Coca River has suffered from supplying the Coca Codo Sinclair Hydroelectric Plant, with erosion of its riverbed leading many to speak out about the negative impacts of hydropower.[25] Relative to its size, Ecuador has the highest annual deforestation rate in the Western Hemisphere.[44] In February 2021, more than 80% of the population of Cuenca in southern Ecuador voted not to allow industrial mining in the watersheds of five local rivers; resource development activities will continue to be affected as citizens organize against threats to their watersheds and livelihoods.[41][45]

References

  1. 1.0 1.1 1.2 1.3 "Panorama Energético de América Latina y el Caribe 2021". OLADE. November 2021.
  2. "Panorama Energético de América Latina y el Caribe 2020". OLADE. November 27, 2020.
  3. "IEA Policies and Measures Database © OECD/IEA". IEA. Retrieved 2021-06-04.
  4. "Plan Nacional de Eficiéncia Energética 2016-2035" (PDF). MEER (Ministerio de Electricidad y Energía Renovable) / BID (Banco Interamericano de Desarrollo). 2017.
  5. 5.0 5.1 "Ecuador - Countries & Regions - IEA". IEA. Retrieved 2021-04-19.
  6. "Ecuador joins the EITI". Extractive Industries Transparency Initiative. October 15, 2020.
  7. "Ecuador joins EITI to boost transparency in oil and mining industries". NS Energy. October 15, 2020.
  8. "Primera Contribución Determinada a Nivel Nacional para el Acuerdo de París bajo la Convención Marco de Naciones Unidas sobre Cambio Climático" (PDF). República del Ecuador. March 2019.
  9. "Ecuador". UNDP. Retrieved 2021-04-19.
  10. "Ecuador receives US$ 18.5 million for having reduced its deforestation". UNDP. July 7, 2019.
  11. "Los permisos ambientales en el Ecuador". Carbono Neutral. October 15, 2020.
  12. 12.0 12.1 12.2 12.3 "Mining 2021 - Ecuador". Chambers and Partners. January 21, 2021.
  13. "Valores / Misión / Visión – Ministerio de Electricidad y Energía Renovable". historico.energia.gob.ec (in español). Retrieved 2021-04-19.
  14. "Misión, Visión y Valores". EP PETROECUADOR. Retrieved 2021-04-22.
  15. Dougherty, Frank (March 1, 2021). "Ecuador's Power Grid Gets a Massive Makeover". Power Mag. Retrieved October 6, 2021.
  16. "Ecuador Labor force - by occupation - Economy". Index Mundi. Retrieved 2021-04-22.
  17. "Public Employment Services: Ecuador" (PDF). International Labour Organization. 2015.
  18. "Ecuador Electricity Master Plan 2016-2025 (PME) – Policies". IEA. Retrieved 2021-04-19.
  19. "Energy consumption in Ecuador". Worlddata.info. Retrieved 2021-04-26.
  20. 20.0 20.1 20.2 20.3 "Ecuador: Energy". CIA World Factbook. Retrieved 2021-06-09.
  21. Sánchez Molina, Pilar (February 25, 2022). "Ecuador mejorará la gestión del Operador Nacional de Electricidad con ayuda del BID". PV Magazine. Retrieved May 3, 2022.
  22. 22.0 22.1 "Ecuador Coal Reserves and Consumption Statistics". Worldometer. Retrieved 2021-04-26.
  23. "Ecuador Primary coal imports, 1949-2020". Knoema. Retrieved 2021-04-26.
  24. 24.0 24.1 24.2 24.3 "Country Analysis Brief: Ecuador" (PDF). US Energy Information Administration. October 5, 2017.
  25. 25.0 25.1 25.2 25.3 "Ecuador's Power Grid Gets a Massive Makeover". POWER Magazine. March 1, 2021.
  26. 26.0 26.1 "Ecuador seeks $1.9 billion in private power generation investment". Reuters. 2021-09-20. Retrieved 2021-10-06.
  27. "International - U.S. Energy Information Administration (EIA)". www.eia.gov. Retrieved 2021-10-06.
  28. "What is Opec? The oil-producer group at the centre of an economic crisis". NS Energy. March 27, 2020.
  29. "Oil and gas regulation in Ecuador: overview". Thomson Reuters Practical Law. November 1, 2020.
  30. "Ecuador to allow private sector to import some fuel, ending Petroecuador monopoly". Reuters. September 25, 2020.
  31. "Is This The Beginning Of The End For Ecuador's Oil Industry?". OilPrice.com. February 16, 2021.
  32. "Ecuador court orders end to gas flaring by oil industry in Amazon". Mongabay Environmental News. March 9, 2021.
  33. Sánchez Molina, Pilar (September 15, 2021). "Ecuador announces renewables auctions, plans to allocate 1 GW". PV Magazine. Retrieved October 6, 2021.
  34. Meyer, Kathrin (March 23, 2021). "The oil trap – Ecuador's quest to clean up its energy mix". Energy Transition: The Global Energiewende. Retrieved October 6, 2021.
  35. GeoEnergy, Think (2021-04-07). "Ecuador's first geothermal plant targeted for 2026". Retrieved 2021-10-06.
  36. Sánchez Molina, Pilar (December 13, 2021). "12 empresas interesadas en participar en la subasta renovable de Ecuador". PV Magazine. Retrieved May 3, 2022.
  37. Sánchez Molina, Pilar (January 21, 2022). "12 empresas interesadas en participar en la subasta renovable de Ecuador". PV Magazine. Retrieved May 3, 2022.
  38. "99 empresas compraron pliegos para la licitación de 500 MW renovables en Ecuador - Energía Estratégica" (in español). 2022-01-20. Retrieved 2022-05-03.
  39. 39.0 39.1 "Closing the loop on steel: what we can learn from a manufacturer in Ecuador". the Guardian. November 20, 2014.
  40. "South America". www.usgs.gov. Retrieved 2021-04-26.
  41. 41.0 41.1 Koenig, Kevin (April 8, 2021). "Indigenous Peoples Fight for Justice a Year After Devastating Oil Spill". Amazon Watch.
  42. Alexandra Valencia, Brian Ellsworth (December 10, 2020). "Strife with indigenous groups could derail Ecuador's drive to be a mining power". Reuters.
  43. "Ecuador Has Big Plans for Its Mining Industry. But at What Environmental Cost?". WPR (World Politics Review). August 12, 2019.
  44. "For Ecuador, a litany of environmental challenges awaits in 2020". Mongabay Environmental News. February 5, 2020.
  45. Herrera, Viviana (February 11, 2021). "Overwhelming Vote in Southern Ecuador Sends Strong Message to Mining Companies". Mining Watch Canada.