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Ecuador Power Key View
- 23 Jun 2022
Key View: This quarter, we maintain our view that hydroelectric power will maintain the lion share in the country's power energy mix, accounting for over 70% of total power generation by 2031. However, we expect the country to gradually lessen its reliance on hydropower with the expansion of thermal and most notably renewables. While Ecuador has seen limited non-hydropower renewables development to date, lagging well behind other markets in Latin America, the government is working to increase investment and boost non-hydro renewables energy deployment in the country.
Headline Power Forecasts (Ecuador 2021-2026)
|Indicator ||2021e ||2022f ||2023f ||2024f ||2025f ||2026f |
|Generation, Total, TWh ||32.9 ||33.9 ||34.5 ||35.5 ||36.4 ||37.2 |
|Consumption, Net Consumption, TWh ||26.9 ||28.1 ||28.9 ||29.6 ||30.5 ||31.5 |
|Capacity, Net, MW ||9,394.3 ||9,638.7 ||9,736.9 ||10,121.4 ||10,265.5 ||10,432.6 |
|e/f = Fitch Solutions estimate/forecast. Source: EIA, Fitch Solutions |
Latest Updates And Structural Trends
- After declining by 1.3% in 2020 as a result of the Covid-19 pandemic, total power generation returned to positive growth in 2021, increasing by an estimated 2.3%. We expect that sector will continue see this trend until the end of our forecast period in 2031. By 2031 the country's power sector will generate 40.8TWh, which translates into an annual average growth rate of 2.2%. Supporting this view, we highlight growing government support for private investment, as it seeks USD6.9bn in investments for 10 projects within the power sector.
- The hydropower sector will retain a leading role in Ecuador's power mix, producing around 71.3% of total electricity in 2031 (down from 76.4% in 2021). The remainder will be largely made up of thermal power, whose share in the country's total power mix will increase from an estimated 21.8% in 2021 to 22.2% in 2031, driven by oil- and gas-fired power projects.
- Non-hydropower renewables capacity will quadruple in the coming decade and reach 1.3GW by 2031. In terms of generation, the sector's share in Ecuador's power mix will rise to 6.5%, up from just 1.8% in 2021.
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