Transcript Energy Strategy - FIU Latin American and Caribbean Center

Sustainable Energy for all
Energy Infrastructure in
Latin America the View of
the IDB
May 6, 2011
Miami, Florida
Investment in Infrastructure in LAC
Total
Public
Private
Source: Calderon y Servén (2010).
Note: Investment in infrastructure includes: telecommunications, electricity, transport (roads and railroads), and water and sanitation. This
graph includes the average of Argentina, Brazil, Chile, Colombia, México y Peru.
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Latin-America Investments Needs in Infrastructure
• Latin-America is Investing in Infrastructure Below the
Required Demand
– The LAC Region invest 1.9% of GDP in Infrastructure (US$43.9
billion), the average investment in the developing world is 5% of the
GDP.
– Investment Requirements:
• 1.0% of the GDP to maintain the existing Infrastructure
• 1.6% of GDP for new investments related to demand (totaling a
2.6% of the GDP or US$81.2 billion).
– Example - if LAC were to achieve universal electricity coverage needs to invest an additional to the above 0.05 % of the GDP per-year.
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Energy Sector is Capital Intensive Sector
Accumulated Investment on Energy Infrastructure per Region
2010-2035
OECD Pacific Basin
Electricity
Oil
Others East Europe / Eurasia
Russia
Gas
Middle East
Carbon
Asia Others
Biofuels
India
Africa
Latin America
OECD Europe
China
OECD North America
US$ trillons, 2009
World Energy Outlook (2010) estimates that LAC needs
approximately US$2.8 Trillion between 2010 and 2035
Source: World Energy Outlook (2010).
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Latin America Investment Needs in the Energy Sector
• The projected annual energy demand growth is 4.8%.
• LAC would have to invest approximately US$28 billion
per year (2009 – 2026) in the electricity sector alone:
– Generation US$15 billion (100,000-MW)
– Transmission from US$4,5 billion
– Distribution US$8,5 billion
• Would also have invest between US$80 to US$90 billion
in the Oil & Gas sector
–
–
–
–
Conventional production US$68 billion
Unconventional production US$9 billion
Refining US$5 billion
Transport US$4 billion
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Latin-America is the cleanest region in the world in Power
Generation
Hydro power generation per Region
LAC has the 20.5% of the world hydro
power generation, while generating just
the 3.6% of CO2 emissions.
Key World Energy Statistics, 2010. Data 2008.
Emissions of CO2 per Region
OECD
Middle East
Ex Soviet Union
Europe non OECD
China
Asia
Latin America
Africa
The challenge is to keep the clean mix of
LAC energy matrix in the context of
economic economic and population
growth
OECD
Africa
Ex-Soviet Union
Latin America
Europe no OECD
Asia
Middle East
China
Bunker
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Rehabilitation of Hydroelectric Power Projects
Rehabilitation of Existing Renewable
Hydroelectric Plants
Potential of Rehabilitation [MW]
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Energy Efficiency
• LAC lags in investments in Energy Efficiency:
– To reduce consumption
– To lower peak demands, avoiding less efficient generation and more GHG
• Most countries have only implemented CFL bulb replacement
• It is estimated that a reduction of 10% of consumption in LAC through
Energy Efficiency could cost some US$17 billion. To supply that energy with
capacity expansion would cost some US$53 billion.
• Areas where more effort is needed:
–
–
–
–
–
Public Sector Energy Efficiency (buildings and roads)
Variable speed motors
Efficient cooling & heating
Commercial and Residential insulation
Load coordination and peak disconnection
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Regional Energy Integration: Central American
Isthmus Electric Interconnection Project SIEPAC
•
•
Estimated expenditures required
without SIEPAC (2011-2025):
–
–
•
Savings with a joint planning of
the expansion of capacity and
joint operation of the grid:
–
–
•
Investments: US$11.7 Billion
O&M: US$10.1 Billion
Investments: US$1.2 Billion
O&M: US$0.3 Billion
Savings with an interconnection
with Colombia and a second
SIEPAC circuit (2014):
–
–
Investments: US$2.1 billion
O&M: US$1.7 billion
Achieving these savings has required:
– Participation of Panamá, Costa Rica,
Honduras, Guatemala, Nicaragua and El
Salvador (1996); Colombia (2005); and
Mexico (2009).
– Legal Framework:

Treaty among countries (1992).
– Governance mechanisms:





Regional Regulator (CRIE);
Grid Operator (EOR);
Owner of the Interconnection line
Transitory Regulatory framework (2002);
Regional Electricity Market regulation (2011).
– Investments:


US$494 million (MDBs, IFIs, Commercial
Banks, Countries);
Grants from IDB: US$24 million.
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