Latin America is the region with the lowest level of readiness for the energy transition on the planet. The finding is from a new study recently published by Siemens Energy. According to the survey, countries in the region have a considerable expansion of renewable energy, but technologies such as power-to-X (synthetic fuels and green derivatives) and carbon capture and storage show less progress. In the assessment of Siemens Energy’s director general in Brazil, André Clark, in order to exert their influence on the global net zero commitment, leaders in Latin America need to change how they think about their energy planning and aim at a strategy that goes beyond local energy demand with a view to foreign markets.
“Latin American nations are best positioned to take advantage of the chance to consolidate themselves as green energy export hubs, since they have favorable conditions in terms of low-cost renewable energy resources, market structure and geographic location”, evaluated the executive. The study by Siemens Energy, called the Global Energy Transition Readiness Index, reveals that North America has the highest readiness index (34%), followed by Europe (33%), Middle East and Africa (26%) and Asia-Pacific (25%). South America appears in last place, with 22% readiness. The survey was conducted with more than 2,000 energy experts, strategists and authorities worldwide.
Despite the result, Clark has good expectations with the development of new renewable projects in the region. “Especially in Latin America, the size of the challenge is not greater than the expectation of gains through its consolidation as a green power. Despite the region showing the least perceived progress in energy priorities compared to other regions, the perspectives are positive, if a green, innovative and planet-oriented industrial development policy is adopted”, he pondered.
Clark also recalls that in addition to the abundance of renewable energy – mainly hydro and increasingly wind and solar -, Latin America stands out for having a set of democracies, which translates into more confidence and less chance of bad weather that harm the energy export flow and solutions.
“In this sense, initiatives and policies aimed at green hydrogen, Power-to-X (synthetic fuels and green derivatives) and carbon capture, use and storage (CCUS), should occupy a significant space in the advancement of companies’ energy transition strategies. and governments of the region, which are already moving towards seeking partnerships and transnational alliances”, he evaluated.
Finally, Clark declares that if governments, companies and society work together, the energy transition is a great opportunity, possible through five points seen as essential: (1) acceleration of renewable energy; (2) improved energy efficiency, with savings and increased electrification in industries; (3) strengthening of electrical networks, with integration across borders; (4) use of existing infrastructure as a bridge, in the case of gas pipelines and offshore operations; and (5) tidying up the supply chain of mineral raw materials and necessary components, using everything from batteries to wind turbines and photovoltaic panels.
“There are no excuses for waiting any longer. An immediate, vigorous and coordinated global effort is needed to avert the worst consequences of climate change – in all regions of the world, and across all sectors.”