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Reports on South America: VRES, grid interconnections, COVID implications

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October 5, 2020

The latest report of the research series carried out by Enel Foundation in collaboration with CESI has been presented on October 5 by our Deputy Director Giuseppe Montesano at a webinar led by the Interamerican Development Bank and held by Energy and Climate Partnership of the Americas and Americas Business Dialogue on "Benefits of physical and regulatory regional integration of electricity markets".

After three analyses that examined different scenarios for the deployment of Variable Renewable Energy Sources (VRES) in a specific set of South American countries i.e. Chile & ArgentinaBrazil and UruguayColombia, Ecuador and Peru, this research carries out the analysis at continental level.

Thanks to the excellent availability of natural resources, the demand growth and the expected decrease of technology costs, the technical-economic optimal amount of VRES installed capacity at 2030 in the Base Case can reach a combined total of almost 50 GW for photovoltaics and 71 GW for wind. These optimal values correspond to an increase of 150% for PV installed capacity and of 75% for wind capacity with respect to the targets and forecasts presented in the generation and transmission development plans of each country – used to formulate the Reference Scenario on which the research was based. The study also showed that cross-border grid interconnections can contribute to install more VRES thanks to an enhanced evacuation capacity from areas with best resource and to the possibility of mutual support and reserve sharing.

In parallel Enel Foundation has investigated the most prominent challenges to the decarbonization process in the continent as emerged from the COVID-19 outbreak, as well as the economic, social and political risk associated with backwards energy policies adopted by national governments. Push-back policies would indeed contribute to amplify the negative effects of pollution and climate change over people and businesses, exacerbating inequalities and preventing the establishment of a sustainable post-pandemic recovery and development pathway in the region.

This special paper highlights the opportunities associated with the adoption of a more ambitious decarbonization path at the continental level. These include improved, extended and affordable access to electricity services for people in the region; economic advantages generated by the phase-out of fossil subsidies; occupational benefits and enhanced social inclusion patterns; improved pollution conditions with effects on health standards; increased regional infrastructure integration that helps optimizing renewables penetration and addressing resilience exigencies.

The study finally offers a number of policy recommendation to strengthen sustainable and reliable energy services for all, allowing Latin America economies and societies to bounce back greener and more resilient. Among the ideas proposed by the paper, the application of strict ‘green’ conditionality rules to any type of loan, grant and public funding; the simplification and speed-up of procedures to authorize ‘green’ investments; the establishment and implementation of national and regional regulations that promote and facilitate cross border power flows, enabling higher flexibility and coordination in electricity markets.

Download here the executive summary of the latest step of the research series and here the special report on the green energy sector in Latin America after COVID-19.

See here a more detailed analysis of the research. 

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