Energy profile: Ecuador
Fuel mix (fossil fuels vs renewables)
Ecuador derives the vast majority of its energy supply from oil, particularly in the transport and industrial sectors. Hydro power is also a key energy source, accounting for more than 62% of installed electrical capacity and 76% of electricity generation as of 2019, with other renewables playing a much smaller role.
Ecuador's Plan Nacional de Eficiencia Energética 2016-2035 aims to promote energy efficiency and the development of renewables. 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.
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. 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.
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.
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.
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.
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.
MEER (Ministerio de Electricidad y Energía Renovable) is responsible for the development and dispersal of electricity throughout Ecuador, with an emphasis on renewable resources.
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.
Other key players
Energy sector employment data
As of 2017, 18.4% of Ecuadorians worked in the industry sector (defined as mining, manufacturing, energy production, and construction). Capital-intensive sectors such as oil and energy continue to see economic growth in Ecuador.
As of 2016, Ecuador was producing 26.5 billion kWh of electricity, with an installed generating capacity of 8.192 million kW. As of 2017, 54% of the total installed capacity was from hydroelectric plants.
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.
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.
As of 2016, Ecuador was consuming 22.68 billion kWh of electricity.
Coal in Ecuador
Ecuador produces no coal, and has no new proposed coal sources or projects. The country ranks 114th in the world for coal consumption. Ecuador must import all of the coal it uses. In 2018, Ecuador imported 17,000 short tons of coal.
Oil & Natural Gas in Ecuador
Almost all of Ecuador's 8.3 billion barrels of crude oil reserves are located in the Oriente Basin within the Amazon. Nearly 85% of Ecuador's total energy supply comes from oil and natural gas. In 2018, Ecuador was producing 517,000 bbl/day. 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.
Imports & source countries
Petroecuador is largely responsible for importation of oil and natural gas. It imports small amounts of LNG. In September 2020, the Ecuadorian government began to allow private companies to import some fuels for industrial and commercial use.
Proposed new sources & projects
New oil and natural gas projects in Ecuador have been met with extensive resistance from local communities, especially indigenous groups. The Ecuadorian court system has administered court orders to end projects found to be in violation of a healthy environment and human rights.
SOTE (Sistema Oleducto Trans-Ecuatoriano) and OCP (Oleducto de Crudos Pesados) are Ecuador's two major crude oil pipeline systems; both are old and not used to their full capacity. Ecuador was a member of OPEC (Organization of the Petroleum Exporting Countries) until January 2020. Ecuador exports approximately 70% of its crude oil. The United States, Chile, Peru, and China are the primary importers of Ecuadorian oil.
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. 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.
Iron & Steel in Ecuador
Ecuador is responsible for approximately 1% of the Latin American steel market. 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.
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. 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. Human rights violations, forced evictions, property destruction, arrests, harassments, and murder are some of the threats faced by environmental activists in Ecuador. 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. Relative to its size, Ecuador has the highest annual deforestation rate in the Western Hemisphere. 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.
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