Energy Integration in South America: Experiences, Potential Benefits, Risks and Challenges

Abstract

As world energy demand grows, in line with an expected increase of at least 30% by 2040, the pressure for sustainable development and the use of cleaner sources of energy will increase. The Latin American and Caribbean Region (LAC) has abundant sources of energy, with great complementarities, which are sufficient to meet its own energy needs, as well as contribute to the energy needs of other regions. However, the lack of energy integration in LAC is at the top of great economic, social and environmental benefits that can benefit the countries of the region. LAC’s main energy demand is expected to grow by 80% and electricity demand by 90%. In this chapter, I look at global and regional energy demand trends, highlighting the increased pressure that countries will face for more sustainable development. What is the position of LAC today in energy integration, what stories of success and failure the region has and identifying the possible benefits accumulated with higher levels of energy integration in the region. In addition, the political aspects of energy integration, the problems of risk and confidence and energy security will be explored. In addition, the existence of a regional consensus on whether energy integration would improve Energy Security in Latin America, what are the main challenges of regulatory convergence / harmonization to advance energy integration and what are the requirements for a positive energy integration agenda are discussed. Finally, the conclusion highlights the main problems to advance energy integration in LAC, where the main challenge is trust and a unified vision that energy integration will bring great benefits to the entire region.