Coca Codo Sinclair Dam Faces Erosion Threat to Water Intake

Ecuador's largest hydroelectric plant -- and the source of roughly one-third of the nation's electricity -- is facing a geological threat that could disrupt power supply across the country.

The Threat

A study conducted by the U.S. Army Corps of Engineers has warned that progressive erosion along the Coca River in eastern Ecuador could reach the water intake structure of the Coca Codo Sinclair hydroelectric plant by 2026. If the erosion compromises the intake, the plant's ability to generate electricity would be severely impaired or entirely lost.

The Coca Codo Sinclair plant is Ecuador's largest power generation facility:

• Capacity: 1,500 megawatts (MW)
• Output: Approximately one-third of Ecuador's total electricity generation
• Location: Napo Province, in the Amazon region, on the Coca River downstream from the San Rafael waterfall (which collapsed in 2020)
• Construction: Built by Chinese state-owned Sinohydro under a $2.6 billion contract, operational since 2016
• Financing: Largely funded by Chinese development loans

The Erosion Problem

The crisis traces back to February 2020, when the San Rafael waterfall -- Ecuador's tallest waterfall at 150 meters -- collapsed entirely. The waterfall's collapse opened a sinkhole that triggered regressive erosion -- a process where the riverbed erodes upstream, moving toward the dam's infrastructure.

Since then, the erosion front has been advancing toward the Coca Codo Sinclair plant's water intake at a rate that has alarmed geologists and engineers. The U.S. Army Corps study modeled multiple scenarios and warned that under likely conditions, the erosion could reach critical infrastructure within the current year.

Key facts about the erosion:

• The San Rafael waterfall collapse was likely caused by the dam's own operations, which altered the river's natural flow patterns and sediment dynamics
• Regressive erosion moves upstream -- meaning it advances toward the dam, not away from it
• Multiple mitigation efforts have been attempted, including gabion walls and engineered river channel modifications, but the erosion continues
• The geological conditions -- volcanic rock layers of varying hardness -- make the erosion unpredictable and difficult to stop

Current Power Situation

Ecuador's electricity grid has been under stress for several years, with rolling blackouts occurring during dry seasons when hydroelectric output drops. The current situation has some positive and negative indicators:

Positive developments:

• Recent rains have improved reservoir levels across Ecuador's hydroelectric system, reducing the immediate risk of blackouts
• A new 200 MW thermal plant has come online, adding backup capacity to the grid
• The government has been investing in transmission line upgrades to improve grid reliability

Ongoing concerns:

• Ecuador's peak electricity demand is approximately 4,500 MW
• If Coca Codo Sinclair (1,500 MW) goes offline, Ecuador would face a 33% capacity shortfall that cannot be covered by existing backup generation
• The country's other major hydroelectric plants -- Paute (1,100 MW), Mazar (170 MW), and Sopladora (487 MW) -- are also dependent on rainfall patterns
• Thermal backup generation is expensive because Ecuador imports the diesel and natural gas needed to run thermal plants

The China Connection

Coca Codo Sinclair is one of Ecuador's most controversial infrastructure projects:

• Sinohydro, the Chinese state-owned builder, has faced allegations of construction defects, including thousands of cracks in the dam's steel-lined tunnels discovered during inspections
• Ecuador took on approximately $19 billion in Chinese debt during the Rafael Correa administration (2007-2017), with oil-backed repayment terms. Coca Codo Sinclair was the flagship project
• The dam was built downstream from an active volcanic region and on a river system that geologists warned was unstable -- concerns that were allegedly dismissed during the project's approval process

What This Means for Expats

• Power reliability is at risk. If the erosion reaches the water intake, Ecuador could face its most severe electricity crisis in history. The 2023-2024 blackouts -- when Ecuadorians endured 8-12 hour daily outages -- could return in a more severe form
• Invest in backup power. If you don't already have a generator or UPS (uninterruptible power supply) system, consider acquiring one. Even if the worst-case scenario doesn't materialize, Ecuador's grid is vulnerable to seasonal dry spells
• The new 200 MW plant helps but isn't enough. Adding 200 MW to cover a potential 1,500 MW loss is like using a garden hose to fight a house fire. It helps at the margins but doesn't solve the fundamental problem
• Electricity costs may rise. If Ecuador needs to run expensive thermal generation to compensate for hydroelectric losses, those costs will eventually be passed to consumers through rate adjustments
• This is a slow-moving crisis, not a sudden one. The erosion is progressing gradually, and the government is monitoring it. You won't wake up one morning to find the dam gone. But the trajectory is concerning, and the mitigation options are limited
• Consider your location's grid resilience. Some areas of Ecuador have more reliable power infrastructure than others. Urban centers and areas near multiple generation sources tend to fare better during shortages

Source: Bloomberg