Electricity in Central & South America - Overview
Latin America has a very fragmented energy market. Over the past decade, with rising population numbers and a blossoming middle class, regional demand for electricity has increased significantly and has resulted, across the region from the resource-hungry Brazil to the oil-exporting Venezuela, in electricity supply shortages, blackouts and brownouts.
In the midst of rising demand, the region has been struggling with a wide-range of issues in building new electric generation capacity. Brazil and Chile have recently stalled plans to build new hydro-powered dams because of human rights and environmental concerns, forcing them to look for other sources of energy to meet projected demand. In Colombia domestic terrorism has led to the destruction of many rural transmission and distribution infrastructures.
Climate change is also adding significantly to problems in the region. In the summer of 2013-2014, Argentinians were hit by one of the country’s most severe heat waves on record — prompting a huge air-conditioning spike in December that set all-time highs for power demand and caused nationwide blackouts. To the northeast, in Brazil, February brought similar news. Peak demand for electricity reached an all-time high of 86 gigawatts. In a country that generates nearly 80% of its electricity from dams, water levels dipped below 37% of capacity, the lowest since 2001. And all this following the country’s second-driest January in 80 years. Even some of the waterfalls from the Iguazu falls, one of the world’s most iconic natural landscapes, largely dried up.
As economies in the region continue to expand Latin America’s power consumption is expected to nearly double by 2030. The World Energy Council (WEC) anticipates that to meet future demand a cumulative investment from 2010 to 2050 of between US$1.33 trillion to US$1.36 trillion will be required. In addition optimising electricity market structures both nationally and across the region, will be essential in solving the gap between demand and supply.
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