The energy transition in Latin America

How much further does Latin America and the Caribbean need to go to get on track and meet the Paris Agreements targets? According to an InterAmerican Development Bank (IDB) report published in August 2022, on current trends, by 2030, the region will emit a net annual surplus of 273 megatons of CO2 equivalent over and above the amount that it absorbs or sequesters. Looking at the electricity sector, regional demand dipped by around 2.9% in 2020 as a result of the Covid-19 pandemic. It then recovered and is expected to return to pre-pandemic levels in 2022-2024. For the rest of the decade, it is expected to grow by an annual average of 3.9%. However, the shift towards using cleaner energy is already underway. The IDB expects coal-fired generation to shrink at an annual rate of 5.4% in the period to 2030, which is described as “a great step towards sustainability”. Solar will grow by 10.4% a year, while wind power will be up by 9.1% per annum. The total cost of new clean energy investment required to 2030 is calculated at US$226bn, a number which may vary as prices change.

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