Energy in Latin America and the Caribbean

Who is ready for the transition?

Over the last decade significant progress has been made to develop renewable energy at a global level. As recently as 2011, with crude oil prices at around US$100 a barrel, solar and wind energy were still uncompetitive compared to fossil-fuel electricity generation. Wind and solar generating capacity was relatively small. But in 2011-2019 global solar capacity grew seven-fold while wind capacity tripled. There were major technological changes in the design and operation of wind turbines and solar panels. Both energy sources are now materially more price-competitive than fossil-fuel electricity, even in a context where the oil price has come down to US$40 a barrel. The levelised cost of energy (LCOE – which accounts for fluctuations and intermittency) fell by 81% to US$0.07kWh for solar and by 38.3% to US$0.053/kWh for onshore wind in 2010-2019. This means that on a level playing field, renewables can now compete without the need for subsidised feed-in-tariffs. Global investment in the energy transition has surged from under US$300bn per annum in 2011 to over US$500bn in 2020. Eight out of ten of the world’s largest economies have committed to achieving net-zero emissions by the middle of the century. Cumulative electric vehicle (EV) sales surged from 0.5m in 2010 to around 10m in 2020.

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