Abstract The Ecuadorian electricity sector has undergone several changes during the past decade. The objective of this paper is twofold: a) to show how the Ecuadorian electricity sector has evolved from 2007 to 2017, and b) to discuss the relationship between energy policies and their impacts on electricity supply, management, tariffs, and the country's economy. Although oil remains as the main energy source and the leading driver for economic revenue, several hydropower projects have been built or are under construction intending in part to reduce the country's dependence on oil. The installed hydropower capacity in the country in 2017 is approximately 81% higher than in 2007 and it is expected that, by 2018, approximately 93% of the electricity will be produced from hydropower. Currently, biomass and biogas contribute with 1.8% of the total electricity generation, but only 0.6% of the electricity is produced in wind and solar farms. Adoption of smart grid technologies is key to transform the Ecuadorian electricity network and to positively impact the quality of the electricity supply. The future of the Ecuadorian electricity sector relies on the successful implementation of the new Organic Law of Public Service of Electricity and on external financing for new energy projects.