Latin America’s shift to clean energy is crucial for the global move toward sustainability, says a new report by the International Energy Agency (IEA).
Titled “Latin America Energy Outlook,” the report shows the region’s rich natural resources and renewable energy achievements.
Latin America uses less fossil fuels than the world average, making it ready for cleaner energy systems. Fatih Birol, IEA’s Executive Director, recognizes this potential.
The region has many resources needed for energy transition, like copper and lithium. Still, fossil fuels are big in Latin America’s economy and energy.
The IEA notes that policies and investments need improvement to fully use clean energy and support countries relying on fossil fuels.
Renewable energy is key to this change. The IEA offers three future energy scenarios for Latin America.
One scenario leads to a 2.4°C temperature rise by 2100, and another meets climate goals, and the third aims for net-zero emissions.
Clean Electricity Sector
Latin America already has a clean electricity sector, mainly from hydropower.
Hydropower is important but has expansion limits, especially in the Amazon. Climate change also threatens hydropower with droughts and rainfall changes.
Solar and wind energy are promising, with Brazil and Chile as leaders. Brazil, Mexico, Colombia, Chile, and Peru are adding more solar power than many other regions.
Latin America could produce low-emission hydrogen at lower costs. Green hydrogen can help decarbonize hard-to-change sectors.
Countries are starting hydrogen projects, but they face resistance due to water use concerns.
Fossil fuels are still big in Latin America. The region has lots of oil and gas but little coal. Argentina is developing shale gas, hoping to export it.
Brazil, Venezuela, and Colombia export oil, while Chile and others import oil and gas. Oil and gas production is rising, with more exports expected.
Each IEA scenario shows rising energy demand in Latin America. How this demand is met depends on the scenario.
Current policies keep fossil fuels dominant, but their share will fall slightly by 2030. If climate pledges are met, fossil fuel use peaks and falls more.
In the net-zero scenario, fossil fuels will drop to half of the energy mix by 2030, thanks to more renewables and better efficiency.
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