World Energy Council study highlights massive challenges to the energy system of Latin America and the Caribbean
World Energy Scenarios findings to be discussed at WEC Colombia event today
31 March 2014, Bogotá, Colombia: The Latin America and Caribbean region must optimise its energy supply options nationally and across the region in order to support the needs of its growing economies and increasing population, according to a World Energy Council (WEC) report to be presented today at an event organised by the Colombian member committee of the WEC (COCME).
The report, "World Energy Scenarios: Composing energy futures to 2050", finds that meeting the Latin America and Caribbean (LAC) region's growth in energy demand will be a significant challenge.
"Our study finds that even in the best case, the growth of energy supply in the region will still be insufficient to meet the rising energy demand associated with economic growth," says Professor Karl Rose, Senior Director of the WEC study, who presents the findings today at the WEC Colombia event.
The report assesses two contrasting policy scenarios.
In the Jazz scenario, there is greater consumer focus on achieving energy access, affordability, and quality of supply with the use of best-available energy sources. Under this scenario, by 2050, the LAC region's economy will be 4.5 times larger than in 2010 (in terms of trillion US$ GDP in 2010 figures), while total primary energy supply will grow by 2.3 times.
In the Symphony scenario, there is voter consensus on driving environmental sustainability and energy security through corresponding practices and policies. In this scenario, by 2050, the LAC regional economy will grow less significantly, by nearly 3.8 times, while total primary energy supply will grow by nearly 1.8 times.
Commenting on the report's findings, Karl Rose says that optimising the region's energy market structure will be crucial to solving the gap in demand and supply.
"Latin America and Caribbean region have a fragmented energy market," he says. "This fragmentation has been hindering the effective use of energy resources nationally and across the region, and has compromised the competitiveness of national energy markets."
"The region will continue to struggle with energy supply problems unless concrete measures are made to integrate its energy markets," he says.
Meeting the future energy demand in electricity alone will require between US$1.33 trillion to US$1.36 trillion of cumulative investment from 2010 to 2050.
The study also finds that in Latin America, large hydropower will continue to dominate the energy mix until 2050, and a major challenge will be in building the necessary infrastructure to meet future demand.
Globally, the study sees a doubling of energy demand by 2050, driven by non-OECD growth. To meet this demand, total global primary energy supply is set to increase by between 27% and 61% (see graphic below).
José Antonio Vargas Lleras, the World Energy Council's Vice-Chair for the LAC region and who comes from Colombia, comments: "As with the rest of the world, the energy sector in Latin American and the Caribbean is facing unprecedented uncertainty and challenges."
"The WEC's Jazz and Symphony scenarios show that despite variations in regional priorities and solutions, the common global message is how choosing one policy solution or the other can have significant impact on the energy sector. It's clear that concerted urgent action is needed now from governments and industry to meet our common challenges," he adds.
The World Energy Council will conduct a more detailed study on Latin America with analysis of select countries. The impact of water as a scarce resource and the role of large-scale hydropower in the region are amongst the themes that will be examined in depth. It will release the results during the WEC's annual Executive Assembly, to be held this October in Cartagena, Colombia.
Today's announcement coincides with the appointment tomorrow of Cristina Morales as the WEC's new Coordinator for LAC. Ms Morales, also from Colombia, will support José Antonio Vargas Lleras on strengthening the WEC's outreach and activities in the region.