You might not see it, but you know it is there. Whether we use it to power our homes or factories, or for transport systems, we are dependent on it. Energy has become as essential as water in modern societies and is indispensable for our lives.
Our most recent study: “Lights on? Energy Needs in LAC to 2040” intends to estimate how much energy is needed in Latin America and the Caribbean through 2040. We estimate that region-wide total primary energy demand to increase by more than 80% through 2040 at an average annual rate of 2.2%, reaching over 1,538 million tonnes of oil equivalent (Mtoe). However, projected energy demand in the region in 2040 is still much lower than the primary energy demand today in countries like the United States and China, which are estimated at 2,215 Mtoe and 2,469 Mtoe respectively.
The region’s six largest economies – Brazil, Mexico, Argentina, Venezuela, Chile and Colombia – are predicted to dominate energy use in the region. More than 83% of the total increase in primary energy demand through 2040 is predicted to come from these countries. Brazil’s primary energy needs will increase at about 2.5% per year, from 294 MTOE in 2013 to 577 Mtoe in 2040. Mexico’s needs will grow even faster, by 2.8% per year, from 191 Mtoe to 400 Mtoe. Energy use is projected to increase more rapidly in Chile and Colombia largely due to more rapid economic growth and higher income per capita.
The figure below provides a snapshot of the energy future in the region. For the region as a whole, per capita energy use will grow from 1.4 toe in 2013 to 2.0 toe in 2040. This is still much lower than per capita energy use in high-income countries today (4.2 toe). However, there will still be big differences in per capita energy use across countries in the region. For instance, in Brazil each person will use on average 2.44 toe of primary energy in 2040, while Chile will more than double the regional average, reaching over 4.66 toe by the end of the outlook period.
Power to Latin America and the Caribbean to ramp up quickly:
Regional power needs are projected to grow by more than 91% through 2040, reaching over 2,970 terawatt-hours (TWh) – growing at an average annual rate of 2.4%. Keeping the lights on for everyone means that the region will need to add nearly 1,500 TWh to meet its additional electricity requirements. Broadly speaking, this figure equals 18 times the electricity generated in 2014 by the largest hydroelectric power station in the region, which is the third largest worldwide, – Paraguay-Brazil’s Itaipu. This study signals the need to plan an unprecedented amount of new energy infrastructure in the region.
The next logical question is: how we are going to supply the required energy needs to countries in the region? Are non-conventional renewable energy sources like solar and wind capable of meeting our energy needs and surpassing conventional fossil fuels as the most important energy sources? Or will countries in the region need to increasingly rely on fossil fuels? Where should the region focus its efforts? All these interesting questions remain to be answered and are avenues for future research. However, the answers will greatly depend on the political will to reach agreements on emission targets. Simply put, the answers will not depend exclusively on financial returns – politics and social norms will shape the future energy mix of the region.
Without any doubt, meeting these energy and electricity requirements imply enormous challenges. In one way or another, every source of energy poses tremendous environmental and social impact. Minimizing that impact while providing affordable and reliable energy for all is the key challenge. To learn more about this issue, download our publication here.