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Regional integration key to unlocking Latin American potential
A new energy scenarios report from the World Energy Council has identified a critical need for large-scale investment and regional integration to unlock greater economic potential and mitigate risks for the energy sector in Latin America and the Caribbean (LAC). The report suggests that if the LAC region is to achieve a sustainable economic growth of 2.7% to 2060, an effective system of broad-ranging regional and international governance, including strong collective climate change policies and regional integration of energy systems, is essential.
Three scenarios – ‘Samba’, ‘Tango’ and ‘Rock’ – are presented in the report, entitled Latin American & the Caribbean Energy Scenarios to 2060 ( https://www.worldenergy.org/publication/2017-world-energy-scenarios/). They identify key areas for action – government policy directions, new energy opportunities, climate-related policies and the need for macro-risk management.
‘It is clear that we are undergoing a grand transition, which is creating a fundamentally new world for the energy industry in Latin America and the Caribbean,’ says Ged Davis, Executive Chair of Scenarios, World Energy Council. ‘We are seeing a fundamental change in geopolitics, lower population growth, and the impact of revolutionary technology. The scenarios demonstrate that the LAC region has great potential to benefit economically from regional integration and cooperation, but has been slow to reap the long-term benefits in the face of short-term political and economic priorities.’
The report also goes on to also highlight new opportunities for wind, solar, geothermal and continued growth in biofuels and natural gas. Although alternative energy sources such as solar wind and geothermal still only account for around 2% of Latin America’ electricity generation, compared with a world average of 4%, the LAC scenarios show that this share will grow rapidly between 2030 and 2060, with up to 20% of Brazil’s electricity generation coming from wind and solar by 2060.
Jose Antonio Vargas Lleras, Chair, Communications and Strategy Committee, World Energy Council, concludes: ‘If the region is to maintain a sustainable rate of growth, unlocking economic potential over the next decades, the focus on the next five years should be to utilise existing interconnections. Currently those interconnection projects are only being utilised as occasional energy exchanges so there needs to be progress in using them in a more permanent basis rather than sporadically. Which, in turn, will increase and attract larger-scale investments, which can only benefit the region and its energy systems.’