The timing of the interconnection aligns with Ecuador’s struggle to incorporate sufficient new generation capacity, having brought only 126.5 MW into commercial operation by mid-September 2026 against a government target of 1,650 MW of firm generation. Hydroelectric production, which typically accounts for 77 percent of Ecuador’s generation during rainy periods, has fallen below 49 percent during drought conditions, forcing the country to rely on costly thermal backup generation and electricity imports from Colombia at prices exceeding $2 per kilowatt-hour, substantially above typical rates of $0.30 to $0.92 per kWh.
On the Peruvian side, the interconnection addresses different but complementary challenges. Peru’s northern grid faces transmission congestion and limited local generation capacity, with approximately half of northern consumption supplied from the country’s central region. César Butrón, president of Peru’s grid coordinator COES, indicated that a planned 500 kV transmission line originally scheduled for 2026 will not be available before late 2029, maintaining pressure on northern electricity costs. When thermal diesel reserves activate due to transmission constraints, marginal costs can surge from typical levels of $36 to $45 per MWh to between $280 and $300 per MWh.
The 1,000 MW capacity figure aligns with preliminary findings from Inter-American Development Bank studies conducted in 2025, which identified a 500 kV line with up to 1,000 MW capacity as the optimal interconnection configuration. Separately, a smaller 220 kV Los Héroes-Parinacota link between Chile and Peru has entered environmental review, with Chilean grid solutions firm EnorChile submitting a $30 million project involving 22 kilometers of transmission line and a substation in the Arica y Parinacota region, scheduled for construction starting January 2028.
Ecuador’s energy imports from Colombia have reached near parity with exports to Peru in recent days, with October data showing 998 MWh imported versus 963 MWh exported, marking a shift from the 279 GWh imported and 28 GWh exported over the preceding year. The country’s largest hydroelectric facility, the 1,500 MW Coca Codo Sinclair plant, continues operating under variable conditions due to low river flows and technical issues, requiring flow rates of 240 to 250 cubic meters per second for optimal generation.
This article was curated and published as part of our South American energy market coverage.
