How to achieve deeper energy integration in Latin America

Modern transmission infrastructure, stronger political cooperation between countries and long-term planning. 

Those are key areas that need addressing to achieve deeper electricity integration in Latin America and, in turn, fully tap the region’s huge energy transition potential and tackle energy poverty, according to specialists.

Latin America has existing as well as under-construction international power links but the region’s potential far exceeds what has been achieved to date.

Building out transmission is “key,” said Álvaro Villasante, CEO of Colombian company Grupo Energía Bogotá (GEB), during Siemens Energy’s Latin America Energy Week.

Countries must offer incentives to the private sector “to continue investing in the networks, in the energy capacity that we need today,” said Villasante, whose company operates in its home market as well as in Brazil, Panama, Costa Rica, Guatemala and Peru.

Tim Holt, a member of the Siemens Energy executive board, outlined the role of advanced technology in transmission.

“State of the art transmission grids will make LatAm a green powerhouse,” Holt said.

Among the latest developments on the energy integration front was the signing of permits authorizing electricity interchange between Chile and Argentina via the 409km, 345kV Interandes transmission line belonging to power firm AES Andes. Chile will export, during daylight hours, power generated from solar plants. At night, Argentina will export to Chile electricity from gas-fired power stations, substituting up to 200MW of diesel capacity.

Companies in Latin America, meanwhile, are ready for the integration challenge and waiting for policy signals and firm long-term plans, the conference was told. Closer coordination between nations and long-term government planning is also needed to ensure investment happens, said delegates, who highlighted what Europe has achieved in terms of integration talks following Russia's invasion of Ukraine, which brought the importance of cooperation and regional energy sovereignty into sharp relief. 

“We have to work together. We have many countries doing different things alone, and this is not the way,” said Villasante. “Countries have to cooperate, countries have to be clear about energy as a key part of national policy.” GEB has a link connecting Colombia to Ecuador.

A sharp focus on planning at all levels is needed, said Ricardo Mota, head of Mexico’s energy control center Cenace. “We need to keep on doing planning, at the regional level, at the national level, at the state level, at the municipal level.” 

In Latin America, energy integration and energy transition are inextricably linked, the conference was told. 

“There’s not going to be energy transition without energy integration; we cannot have one if we don’t have the other one,” said Marcio Szechtman, director of transmission at Brazilian state power company Eletrobras.

The region’s biggest economy, Brazil, has international power links with Uruguay, Argentina, Paraguay and Venezuela. Last year, amid drought conditions, Uruguay and Argentina boosted exports to Brazil to help offset weak hydroelectric output. Following increased rainfall, Brazil agreed to help Argentina – which faces the prospect of expensive and possible insufficient fossil fuel imports – to keep the lights on this winter.  

Various projects, such as Chile-Peru, Brazil-Bolivia, Bolivia-Peru, Ecuador-Peru and Brazil-Guyana links, are in the early development, or studies phase, according to a 2021 interconnection map from regional energy integration committee Cier.

Regulation must focus on addressing environmental, social and government, or ESG, considerations, to help ensure projects advance, the seminar was told.

About 18mn people in the region do not have access to electricity, while nearly 90mn people live in extreme poverty. “Sometimes we’re talking about energy transition but for some people, there is no energy transition, there is no energy at all,” said Villasante, adding that, at the end of the day, solutions must be geared to improving people’s quality of life.

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