The Latin American and Caribbean has one of the richest sources of natural renewable energy in the world. It boasts enormous potential for non-conventional renewable energy. In fact, it is estimated that if the region exploited just a tiny fraction of its non-hydro renewable capability, it could meet the energy demands of the region’s growing economies.
So why has the region’s uptake of non-traditional clean energy technologies been so slow? False perceptions have blocked what otherwise would be the most obvious way forward.
The myth that renewable energy is highly expensive compared to fossil fuels remains, but it is a myth. Between 2009 and 2014 the generation costs for solar energy have fallen by 80 per cent; wind energy generation costs have declined about 60 per cent. Both technologies are highly cost competitive with fossil fuels in many markets. Besides, they provide numerous non-market benefits, especially those associated with climate change and reducing health risks.
Another mistaken perception: that traditional energy technologies and an expanding grid are the best approach for delivering energy to the rural poor. The opposite is true. Renewable energy technologies are far more amenable to reaching rural populations, precisely because they are not dependent upon investment in a grid.
But this scenario is rapidly changing. The myths surrounding renewable energy are being dispelled, particularly the myth that it is too expensive. In just a couple of decades, Latin America and the Caribbean have become a hub for clean energy technologies. In 2013, US$16 billion was allocated to invest in renewable energy in the region, accounting for seven per cent of global clean energy investments.
The Latin America and the Caribbean region is experiencing a silent and complex renewables revolution, but progress is slow. The region is still dependent on fossil fuels and hydropower. Alongside renewable energy, its countries continue to explore non-renewable techniques such as fracking to access new oil and gas reserves. New hydroelectric complexes are being developed. It is estimated that more than US$40 billion is currently used to subsidise fossil fuels in the region. Traditional energy sources will not disappear any time soon in the region or elsewhere in the world.
But the modern renewable energy market is growing quickly. There are many examples across the region of the development of clean energy projects. This report shows that Latin America and the Caribbean have significant potential to show what a clean energy future could look like.
Mexico, Chile, Brazil, Uruguay and Costa Rica epitomise the work the region is doing to accelerate the necessary paradigm shift. Currently, only six per cent of electricity in the region comes from modern energy sources like solar, wind, biomass or geothermal power. However, it is expected that by 2050 this will have grown to 20 per cent.
Clearly, there is a strong economic and financial case for investment in renewable energy, alongside an enormous global imperative to move away from the burning of dirty fossil fuels which cause global warming.
The Latin American and Caribbean region has the opportunity to develop in a different and better way. It can move away from fossil fuels and become a global renewable energy leader. The region has all the renewable natural resources it needs to become a paragon for clean energy projects. It offers both an opportunity and a responsibility to future generations. It has all that it is needed to shape a green economy future.
Let the clean energy revolution begin!
Yolanda Kakabadse is the President of WWF International.