Ecuador's Energy Bill Is Exploding: Diesel Up 64%, Thermal Generation Up 41%, and Contracts Keep Failing

Ecuador's emergency energy strategy is getting more expensive by the week — and the backup plans keep falling apart.

The Diesel Problem

With Colombian electricity imports cut off and the Coca Codo Sinclair hydroelectric plant running at just 40% capacity, Ecuador has been forced to rely heavily on diesel-powered thermal generation. The numbers are staggering:

| Metric | 2025 | 2026 (Jan-Apr) | Change | |--------|------|----------------|--------| | Average monthly thermal generation | 562.83 MW | 793.40 MW | +41% | | Diesel 2 price per gallon | .11 | .45 | +64% | | Premium diesel per gallon | .18 | .90 | +79% | | Overall fuel consumption | — | — | +23% |

April was the worst month yet: thermal generation averaged 919 MW and exceeded 1,300 MW on certain days. Peak electricity demand hit 5,374 MW on April 14, driven by coastal heat waves.

For context, 85% of Ecuador's diesel is imported. Every gallon burned in a thermal plant is paid for in dollars that leave the country.

The Contracts That Keep Failing

The government has been trying to rent thermal generation capacity as a stopgap before the October dry season. It's not going well.

May 4: Celec declared the Pascuales thermal generation rental process failed. The contract was for 50 MW of diesel generators, budgeted at ** million**, with a target completion by end of August. All four bids were disqualified — one missed the deadline, three didn't meet minimum technical requirements.

April 27: Elecaustro declared the El Descanso III thermoelectric plant project failed — that was 20 MW that won't be coming online.

Of five thermal rental contracts launched in April, two have already collapsed. Four remain pending. A sixth process for 60 MW in Salitral hasn't officially launched yet.

Why This Matters

The government's own projections show an 18% risk of blackouts from October 2026, when the dry season reduces hydroelectric output. The thermal plants were supposed to be the safety net. With contracts failing and diesel costs soaring, that safety net has holes in it.

What This Means for Expats

On blackout preparedness: The October risk we reported on yesterday just got worse. Two failed contracts mean 70 MW of backup generation that won't exist. If you haven't invested in a UPS or backup power solution, the window to prepare is narrowing.

On cost of living: Ecuador's electricity rates are subsidized, but the government is spending dramatically more to generate each kilowatt. This fiscal pressure eventually translates to either higher electricity rates, reduced government services elsewhere, or both.

On diesel prices: If you drive a diesel vehicle in Ecuador, you've already noticed the price at the pump. The same dynamics pushing thermal generation costs up are affecting transport and agriculture costs — which means food and logistics prices across the country.

The bottom line: Ecuador is paying a steep premium to keep the lights on right now, and the backup plans for October aren't materializing. This is a slow-moving crisis worth tracking.

Sources: Primicias