Ecuador’s electricity deficit problem worsened on Monday, May 4, 2026 when the Corporación Eléctrica del Ecuador (Celec) declared its 77 million dollar tender for a 50 MW diesel-generator lease at Pascuales failed because all four bidders were disqualified for missing minimum requirements or contract deadlines.
The collapse marks the second power-contract failure in less than a month, after Elecaustro declared the 32.6 million dollar El Descanso III tender (20 MW) deserted on April 7.
The cumulative tally is now nine failed thermal-generation procedures between 2024 and April 2026, leaving 871 MW of planned capacity unbuilt as Ecuador heads into the October-March dry season with a confirmed 866 MW power-generation gap and a confirmed 1,439.8 MW projected total shortfall for 2026.
Key Points
— Celec declared 50 MW Pascuales diesel-lease tender failed on May 4; budget was 77 million dollars.
— Second failed power contract in less than a month, after Elecaustro’s 20 MW El Descanso III on April 7.
— Cumulative: 9 failed thermal-generation tenders since 2024, totaling 871 MW unbuilt.
— Cenace gap: 866 MW pending; 2026 total projected shortfall 1,439.8 MW (+48.9% YoY).
— Pascuales 50 MW had been targeted to come online by end-August 2026 ahead of the dry season.
What Just Happened
The Rio Times, the Latin American financial news outlet, reports that Celec confirmed on May 4, 2026 the termination of the Pascuales 50 MW diesel-generator lease tender, which had a budget of 77 million dollars and had been targeted to come online by end-August 2026 ahead of the October estiaje (dry season). According to documents from the Sistema Oficial de Contratación Pública, four bidders were disqualified for either failing to meet minimum technical requirements or for unviable contract deadlines. The April 7 Elecaustro declaration of El Descanso III as deserted (20 MW, 32.6 million dollar budget, with 35 percent advance and 310-day delivery) followed the same pattern of bidder disqualifications.
Marco Acuña, coordinator of the Consejo Consultivo de Ingenierías y Economía, told local media the failed bidders “did not meet minimum requirements” specified in the tender documents. The structural backdrop is severe: Cenace, the national grid operator, said in late 2025 that 866 MW of new firm generation are still needed to maintain reserve margins without depending on Colombian electricity imports, while the 2026 projected shortfall stands at 1,439.8 MW (a 48.9 percent jump versus 2025’s 966.5 MW).
The Cumulative Failure List
Beyond the Pascuales 50 MW and the El Descanso III 20 MW, the failed-tender list since 2024 includes Ecuagran II (100 MW floating thermal lease), 340 MW from Italian firm Ansaldo, the Quevedo III emergency unit (50 MW) and Salitral (100 MW) under Progen, Esmeraldas III (91 MW) under Austral Technical Management, and the Esmeraldas IV (150 MW), Durán (100 MW), and Pascuales (260 MW) Celec priorities. The Progen contracts are now in a legal limbo over alleged compliance failures; Celec had paid Progen 97.4 million dollars by June 2025 (about 65 percent of the 149 million dollar combined contract value).
Why It Matters
Cenace’s risk modelling assigns a 13 percent probability of power deficit during the October 2025-March 2026 dry season, rising to 17 percent for 2026-2027, 23 percent for 2027-2028, and 50 percent for 2028-2029 before easing to 17 percent in 2029-2030. In a severe-drought scenario, the cost of unsupplied energy could exceed 2.6 billion dollars; the failed Pascuales 260 MW lease alone (separate from this 50 MW failure) could prevent up to 488 million dollars in losses if it eventually comes online for November 2026 and January 2027. Ecuador imports diesel, and the gallon price has moved from 2 dollars to 4 dollars in recent weeks on the Middle East war effects, raising the marginal cost of thermal generation from 22 cents per kWh to 38 cents per kWh.
The Mazar reservoir, which feeds the Paute hydroelectric complex (about 40 percent of national supply), lost 14 metres from its 2,153-metre maximum cota over December 2025 and dropped a further 6.8 metres in the week of March 23-29, 2026. The Paute river is flowing at 17.45 m³/s versus the optimal 141 m³/s, while Coca Codo Sinclair operates at 100 m³/s versus a required 222 m³/s. Daily peak demand reached a record 5,110 MW on May 7, 2025 and Cenace estimates demand growth of about 315 MW per year.
| Indicator | Value |
|---|---|
| Pascuales 50 MW tender budget | USD 77 million |
| El Descanso III 20 MW tender budget | USD 32.6 million |
| Cumulative failed tenders 2024-2026 | 9 (totaling 871 MW) |
| Cenace’s pending generation gap | 866 MW |
| 2026 projected total shortfall | 1,439.8 MW (+48.9% YoY) |
| 2026-2027 deficit risk (Cenace) | 17% |
| Severe drought cost upper bound | USD 2.6 billion |
| Diesel cost per kWh (post-Iran) | ~38 cents (vs 7 cents hydro) |
Connected Coverage
For broader Ecuador context, see our coverage of the Quito bus strike against the diesel subsidy removal earlier today and our coverage of Ecuador’s tariff cut on Colombian goods to 75 percent.
What Happens Next
- Re-tender Pascuales 50 MW: Celec must relaunch within weeks to keep August target.
- Erin Sultan barge contract expiry July 2026: Last 300 MW barge lease ends; replacement uncertain.
- Imports from Colombia: Confirmed coverage through March-April 2026; renewal needed for next dry season.
Frequently Asked Questions
What is Ecuador’s electricity deficit?
Ecuador’s electricity deficit is the gap between projected demand and firm generation capacity, currently at 866 MW according to Cenace data. The 2026 projected total shortfall is 1,439.8 MW, a 48.9 percent jump versus 2025’s 966.5 MW. The structural problem is hydroelectric dependence (Paute complex supplies about 40 percent) combined with recurring failed tenders to add new thermal capacity.
Why did the 50 MW Pascuales tender fail?
Celec declared the Pascuales 50 MW diesel-generator lease tender failed on May 4, 2026 after all four bidders were disqualified for missing minimum technical requirements or unviable contract deadlines. The budget was 77 million dollars and the target was end-August 2026 to come online before the October dry season. This is the second power-contract failure in less than a month, following El Descanso III (20 MW, 32.6 million dollars) on April 7.
What is the blackout risk for late 2026?
Cenace’s risk modelling assigns a 17 percent probability of deficit during October 2026 to March 2027, rising to 23 percent in 2027-2028 and peaking at 50 percent in 2028-2029. In a severe drought scenario, the cost of unsupplied energy could exceed 2.6 billion dollars. The Mazar reservoir continues to fall (14 metres lost since December 2025) and the Paute river is flowing at 17.45 m³/s versus an optimal 141 m³/s.
How does the diesel-price spike fit in?
Ecuador imports diesel, and the gallon price has roughly doubled from 2 dollars to 4 dollars on the Middle East war effects, raising the marginal cost of thermal generation. Hydroelectric generation costs about 7 cents per kWh, diesel-fired thermal generation 22 cents per kWh in normal conditions, and could reach 38 cents per kWh at current diesel prices. This further raises the cost of any contingency thermal generation Ecuador must lease.
Updated: 2026-05-06T20:25:00Z by Rio Times Editorial Desk