Meeting the Balance of Electricity Supply and Demand in Latin America and the Caribbean

The development of the power sector will be critical for the Latin American and Caribbean (LCR) Region’s economic growth over the coming decades. For the past forty years, economic and social development in LCR has been supported by a widespread program of electrification; it has greatly increased the provision of electricity services to households, commerce, and industry. In the coming decades, the supply of electric power will need to expand to meet the growing demand for electricity, but the way in which the production and use of electricity develops will have broad ramifications for the diverse economies and societies of the Region. The responses to the following questions will be critical to the development trajectory of the power sector in LCR:   ·        How much investment will be required to satisfy the needs of economic development and to provide access to those without electric power? ·        Is the expansion of electricity supply likely to increase or decrease the diversity of the generation technology mix?

Regional Studies

 ·        What changes to the regulatory framework are needed to allow the power sector to meet increasing demand, address growing environmental concerns, and attract private capital to reduce the financial burden on government budgets?

 ·        Are there opportunities to avoid new power generation capacity by producing and consuming electricity more efficiently and by developing regional electricity trade?

The objective of this study is to provide an assessment of the electric power sector in LCR through the year 2030 and in the process provide initial potential answers to the questions above. The study begins by examining the history of the power sector in the region, with a focus on the development of electricity production and the associated policies and institutions. The study uses a common modeling framework to examine possible future trends in electricity supply. Critical outputs from the modeling analysis are presented in the form of a baseline scenario to 2030 for countries and sub-regions.  The baseline scenario includes the demand for electricity, the total new supply of electric generating capacity needed, the technology and fuel mix of the generating capacity, and the CO₂ emissions of the sector. In addition, the study examines a range of options and the policies needed to meet the future electricity supply challenges in the Region, including the expansion of the use of hydropower, natural gas, and non-hydro renewable energy resources, increased regional electricity trade, and efficiency improvements on both the supply and demand sides.