December 20, 2023
The future of clean energy in the Americas
The second of a six-part series following up on the IX Summit of the Americas commitments.
A report by the Adrienne Arsht Latin America Center in partnership with the US Department of State. This readout was informed by multi-stakeholder dialogues focused on facilitating greater, constructive exchange among multi-sectoral thought leaders and government leaders as they work to implement Summit commitments.
Executive summary
The main challenges that Latin American and the Caribbean (LAC) countries are facing include infrastructure issues (weak and insufficient transmission lines), and limited uptake of new solar photovoltaic (PV) and wind technologies. Despite these challenges, LAC is on track to capitalize on emerging clean energy technologies, including production and export of green hydrogen (GH2), as well as play a role in supplying the global energy system with critical minerals needed for the energy transition, such as lithium and copper.
LAC countries are facing major challenges in their ability to develop renewable energy projects, expand low-emission energy systems, and fill existing technical and financing gaps that hinder regional energy security. A key takeaway to come out of the Summit Implementation Roundtable was that the US-Caribbean Partnership to Address the Climate Crisis 2030 (PACC 2030) has the potential to advance clean energy goals in the Caribbean and become a blueprint to address similar challenges in Latin America.
Recommendations for advancing the clean energy sector in the Americas:
1. Addressing technical assistance challenges to move projects through the development pipeline:
- Take stock of grid technologies and size prior to developing an energy transition plan and assess national and regional capacity to support initial project
development. - Expand US energy-based cooperation programs, like PACC 2030, to support LAC prioritization of reaching renewable energy targets and modernize grid systems.
- Develop skillset and blended capital to move projects through the development pipeline and to the Final Investment Decision.
2. Expanding power generation:
- Explore opportunities in LAC to increase scale of projects by aggregating them within a group of countries, particularly in the Caribbean.
- Frame the clean energy transition as a form of climate adaptation to open new areas of financing for “green” projects and accelerate clean energy power generation.
- Expand the focus of microgrids at critical facilities (health centers, schools, and government- operated buildings) as they can ensure reliable energy supply during and after natural disasters.
3. Fostering LAC’s role in the global energy system:
- Drive utility scale, energy storage and battery production for EVs. LAC remains the leader of production of copper and holds more than 60 percent of all lithium reserves globally. GH2 production is expected to increase over the next decade and if the appropriate transport infrastructure is developed, the region can be a leader in exports to Europe.
- Develop new low-cost financing instruments for clean energy projects, market creation to maximize benefits from GH2 exports, and expand capacity building and trainings to fill future skills gaps within emerging clean energy technologies in LAC countries and its private sector, making energy systems competitive globally.
- Encourage transatlantic cooperation to support LAC countries benefiting by new regulatory changes derived from emerging industrial policies in the global north such as the Inflation Reduction Act and the EU Carbon Border Adjustment Mechanism.
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The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.
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Image: Windmill on top of mountain. | Appolinary Kalashnikova via Unsplash