Latin America and the Caribbean: Leading the green energy transition amid climate challenges
Andrés Rebolledo Smitmans is the executive secretary of OLADE. This essay is part of the Global Energy Agenda.
Latin America and the Caribbean constitute a green region. It is home to the planet’s most significant natural lung: the Amazon rainforest. In addition, it has an energy matrix with the highest levels of renewable energy participation at 33 percent compared to a global average of 14 percent. This fact allows us to state with pride, but aware of our responsibility, that we are the greenest region on the Earth.
At the same time, this highly renewable resources region suffers more than any other from the growing and visible impacts of climate change. Events of unprecedented magnitude and frequency, such as extreme and prolonged droughts, coupled with unprecedented floods and hurricanes that most frequently affect Caribbean countries, are causing damage to infrastructure and families, and seriously jeopardizing the security of energy supply. The situation is reaching extreme levels in some countries, with cases of rationing impacting their economies and populations.
We live in a region with a great wealth of natural resources, especially renewable resources, all of which are waiting for adequate exploitation. We have used only 30 percent of the water, 12 percent of the wind, and 1 percent of the solar radiation available. Our energy transition industry also has large reserves of critical minerals. In other words, the enormous availability of energy resources also promotes us as one of the world’s major producers and suppliers of low-emission hydrogen.
The region shows substantial progress in its energy transition toward more decarbonized economies. According to the latest data published by the Latin American Energy Organization (OLADE) in the 2024 Energy Outlook for Latin America and the Caribbean, the share of renewable energy in electricity generation increased from 53 percent to 68 percent in the past ten years, while greenhouse gas emissions were reduced by 26 percent. In addition, 77 percent of the new electricity generation capacity incorporated last year was renewable.
In the social aspect, 97.4 percent of electricity service coverage was achieved. However, 17 million people still lack access to electricity, 180 million live in poverty, and 77 million do not have access to clean cooking systems, which primarily affects women. These facts compel us to seek alternatives and encourage the region to work together in the search for more robust, flexible, and resilient energy systems that can benefit all. Based on the region’s energy wealth, it is essential to generate local value chains through the development of sources that create jobs and wealth.
In this context, there are increasingly demanding and pressing challenges. The energy transition and the decarbonization of economies require investments in unprecedented volumes of materials, which must flow and materialize in relatively short periods. This endeavor requires consolidated institutional schemes, with policy and regulatory frameworks that spread the signals of stability and security sought by investors while maintaining the flexibility required by a changing technological environment.
The lessons learned by countries that have already made progress in their energy transition processes also show that it is just as important to diversify energy production as it is to strengthen transmission and distribution. Also, this goal requires significant investments and favorable environments for their development.
There are, jointly with opportunities, relevant economic and social challenges. We are responsible for focusing our efforts on making energy a transversal axis of development, contributing to closing the poverty gaps afflicting our region with better levels of access to energy, healthy cooking systems, and access to information and, in short, creating conditions of equity in the broadest sense of the concept.
The energy setting experienced currently by the world and our region reaffirms the urgency and shared responsibility to act against climate change and its effects, as well as the need to increase and strengthen collective action. In this regard, the region needs to advance energy integration. Significant progress has been made in this area, but there is still a long way to go in consolidating a regional market. Collective action involves dialogue at the intersection of all public- and private-sector actors, academia, international organizations, multilateral banks, and civil society.
Beyond expressions of goodwill, OLADE, an intergovernmental organization that brings together twenty-seven countries in Latin America and the Caribbean, has been working hard to create the right conditions to deepen and fast-track the energy transition processes in these regions.
The OLADE Meeting of Ministers is the highest governance structure of our organization, which brings together the highest energy authorities of its member countries. At its recent meeting in Asunción, Paraguay, it adopted a series of resolutions that mark the path to be followed by the region. These decisions seek to improve energy efficiency in all member countries, eliminate the use of coal for electricity generation, and institute a Regional Energy Planning Council, which aims to further advance progress on our common energy and climate goals.
Our main commitment is to integrate the region’s energy as an instrument that will allow us collectively to better face the impacts of the current environment, plan our future, and build, with the support of all, a better world for future generations.
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Image: San Juan, Argentina.- In the photos taken on January 6, 2022, it shows the Anchipurac photovoltaic solar park located in the province of San Juan, Argentina. In 10 years, the installed capacity in Latin America has gone from 60 MW to 20 GW, however, more than 85% of that capacity is concentrated in four countries: Brazil, Mexico, Chile and Argentina, according to the Global Solar Council.