Renewable Energy Growth Opportunities In Latin America & Caribbean
The renewable energy focus has slowly been shifting away from traditional national powerhouses in Europe and North America towards developing nations, primarily across the Southern Hemisphere. A new report published by the Worldwatch Institute has analysed the particular market barriers and growth pathways available for two specific regions, Latin America and the Caribbean, and found that renewable energy growth could address significant economic, social, and environmental challenges.
The report, Study on the Development of the Renewable Energy Market in Latin America and the Caribbean, published Wednesday, was designed to identify renewable energy growth opportunities and barriers, and offer up specific methods to overcome these challenges.
“Our goal was to prepare a concise and comprehensive report on the current status of, and powerful drivers for, renewable energy in the LAC region,” says Alexander Ochs, Worldwatch’s Director of Climate and Energy and the project leader.
“We identify key technology, market, and policy barriers, as well as concrete instruments to overcome them. Because of the region’s high vulnerability to extreme weather events, we specifically address the energy sector’s climate change adaptation needs. And we provide a clear set of recommendations to multilateral banks for how to best fulfil their important role in supporting renewable energy development and deployment.”
Of particular interest were the particular opportunities to address key economic, social, and environmental challenges that investing in renewables will provide Latin America and the Caribbean. The authors of the report identified several such challenges, including:
- Achieving universal access to electricity
- Meeting future electricity demand
- Transforming the electricity system
- Mitigating and adapting to climate change
As the report’s authors note, “renewables are increasingly the most economic option for new generation capacity, especially for countries that depend on fuel oil for power generation, such as many in Central America and the Caribbean.”
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Hydropower has long been an important part of Latin America and the Caribbean’s energy mix. Large-scale hydro has long been and will continue to be the driving force of renewable energy the world over, and most definitely in Latin America and the Caribbean.
“The region has the world’s greenest electricity mix in terms of carbon intensity,” says Ochs. “But its large dependence on hydropower creates a security risk for many countries, given changing rainfall patterns, melting glaciers, and the competition for scarce water resources among economic sectors. New distributed renewables have world-class potentials in many parts of LAC and are an effective and cost-efficient way to both mitigate and adapt to climate change.”
The report claims that, even dismissing large-scale hydro, Latin America and the Caribbean have the potential to generate more than 78,000 TWh of electricity from renewable energy sources, enough to meet the region’s current and future energy needs many times over.
“The falling prices of renewables, their abundance, their complementarity, and their reliability today make renewable energy an economically favorable alternative to all conventional technologies in almost all countries of the region—if there is open and fair competition,” says Ochs. “But in many places, existing policies still support fossil fuels, and additional hindrances often exist, including social, market, and finance barriers. Governments have a responsibility to address these, and multilateral banks have important tools to support them.”
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