Electricity losses could cost LatAm power distributors up to US$16.6bn a year

The annual cost for power distributors in Latin America from electricity losses ranges between US$9.6bn to US$16.6bn.

That is according to a study released by IDB that estimates the losses are equivalent to 0.19-0.33% of the region’s GDP.

“The prevalence of electricity losses in the region of Latin America and the Caribbean (LAC) is a persistent challenge, marking a substantial deviation from global standards. In the last three decades, the region has recorded losses of around 17% of energy generated, a figure that triples that of OECD member countries,” the research highlights.

Honduras and Paraguay top the list of countries in the region with the highest losses.

Read ANDE invests in cutting-edge technology to combat electrical losses and Think-tank pegs Honduras power losses at US$900mn in 2023

The authors attribute the losses to a mix of technical, financial, socioeconomic, regulatory, and political factors, and argue that levels have not improved which requires more aggressive measures.

To combat the losses, the analysis estimates that it is necessary to multiply grid and storage investment between three and six times, coupled with greater private sector participation, more oversight, and digitization, among other actions.

Source: IDB study

The research adds that users consider a higher power price acceptable if a notable improvement in service quality is guaranteed.

Another consequence the study raises is that the losses lead to the emission of 5.6Mt/year of CO2, with a social cost of US$320mn.

The 212-page study, only in Spanish, is available in the Documents box in the top right corner.