Unlocking Energy Transition: Lcoe Values for Techno-Economic Scenarios

Ecuador’s energy transition represents both a challenge and an opportunity to align national development objectives with global decarbonization goals. This paper evaluates how coherent policy mixes combining regulatory reform, fiscal incentives, public investment, blended finance, and social safeguards can accelerate the adoption of low-carbon technologies while delivering social and economic co-benefits. A techno-economic scenario is conducted to model solar, wind, geothermal, and distributed storage to estimate levelized costs of electricity (LCOE) and employment outcomes across three policy pathways. Results indicate that solar PV and wind are already cost-competitive, with LCOE values falling below fossil alternatives when concessional finance reduces the discount rate. Transformative scenarios can create up to 70,000 net jobs and cut more than 40 MtCO₂ by 2040, provided that retraining and just transition programs are implemented. However, fiscal constraints, grid integration costs, and governance capacity remain key bottlenecks. The findings underscore the centrality of finance, predictable incentive frameworks, and inclusive policy design for enabling Ecuador to achieve an economically feasible and socially equitable energy transition. This study contributes an evidence-based roadmap that situates Ecuador within broader Latin American energy trends and offers actionable recommendations for policymakers seeking to balance sustainability, competitiveness, and equity.