Electric Integration in Latin America: Drawing from Europe’s Experience
Europe serves as a prime example of a deeply integrated electric sector. Take Denmark, for instance, with an energy demand of around 4,000 megawatts (MW).
It boasts an electric interconnection with Germany, which has a capacity of 2,500 MW—over 60% of Denmark’s demand.
This connection supports the export of Denmark’s wind generation and the Nordic countries’ hydroelectric power. It also imports solar energy from Germany.
The key advantage here is the optimization of energy resources through diverse energy mixes among countries. This approach creates a robust energy portfolio.
In the Southern Cone—comprising Brazil, Argentina, Uruguay, and Paraguay—the potential benefits of such energy portfolio effects through electric integration are significant.
From the 1970s to the 1990s, there was a major focus on regional integration. This period was marked by the construction of three crucial binational hydroelectric plants.
These plants are Itaipu, shared by Brazil and Paraguay; Yacyretá, shared by Argentina and Paraguay; and Salto Grande, shared by Argentina and Uruguay.
Despite these physical connections, Southern Cone’s electrical integration remains nascent in terms of institutional cooperation and the robustness of regulatory frameworks.
This is stark compared to other Latin American initiatives, such as the Central American Electric Market (MER). It also contrasts with the emerging Andean Electric Market regulations.
The Andean and Central American Energy Markets
The Andean market, currently featuring an operational interconnection of 500 MW between Colombia and Ecuador, shows promise.
This is especially true with recent developments like the multinational resolution passed in May 2024, which established operational and commercial market rules.
The Central American Electric Market, operational since 2013, connects six countries with transmission lines and common operational rules, facilitating important bidirectional exchanges.
As the global energy transition unfolds, the benefits of robust cooperation agreements become increasingly apparent, aimed at mutual advantage.
Establishing these agreements is complex and challenging but offers crucial lessons from both European and Latin American experiences.
The story of electrical integration in Latin America illustrates the importance of regional cooperation. It also highlights the potential benefits this cooperation holds for economic and energy security.
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief