Rethinking our energy future 3GFLAC Bogota, June 18th, 2013

Examples of specific RE-rich sites for electricity generation Renewable energy resource technical potential for electricity generation in LAC (PWh) Examples of specific RE-rich sites for electricity generation

Examples of specific RE-rich sites for electricity generation Renewable energy resource technical potential for electricity generation in LAC (PWh) Examples of specific RE-rich sites for electricity generation Total generation potential: 78 PWh Corresponding peak capacity: 33 TW

Costs of renewables are coming down Costs (US$/MWh) Year Wind Biomass Small hydro Solar Argentina 2009 127   572 Brazil 2006 150 70 96 77 80 2010 75 82 81 Chile 102 Honduras 120 148 México 66 Panamá 2011 91 Peru 63 60 220 Uruguay 85

Costs of renewables are coming down

Societal benefits make renewables even more attractive Long-term energy security Energy price risk hedging Reduction of vulnerability to climate change Job creation Reduced local health and environmental impacts Attraction of new investments Mitigation of climate change

Societal benefits make renewables even more attractive Approximate value of societal benefits: 50 USD / MWh Long-term energy security Energy price risk hedging Reduction of vulnerability to climate change Job creation Reduced local health and environmental impacts Attraction of new investments Mitigation of climate change

Fossil fuel technologies Renewable energy technologies Inherent differences Fossil fuel technologies Renewable energy technologies Contract duration Short / long-term Long-term Energy costs Variable Constant Generation profile Baseload / peak Power plant scale Large / medium Medium / small Societal benefits No Yes

Fossil fuel technologies Renewable energy technologies Inherent differences Bias in market* rules Fossil fuel technologies Renewable energy technologies Contract duration Short / long-term Long-term Energy costs Variable Constant Generation profile Baseload / peak Power plant scale Large / medium Medium / small Societal benefits No Yes * “Market” in the broad sense of the term

Fossil fuel technologies Renewable energy technologies Inherent differences Bias in market* rules Fossil fuel technologies Renewable energy technologies Contract duration Short / long-term Long-term Energy costs Variable Constant Generation profile Baseload / peak Power plant scale Large / medium Medium / small Societal benefits No Yes Uneven playing field * “Market” in the broad sense of the term Image: http://bit.ly/BiasedField

Accommodating variability Electricity systems can accommodate a large share of variable generation, through Flexible generation technologies such as hydro Exchange with neighboring systems (regional integration) Energy storage Demand management Images: http://bit.ly/XOPDxl

Accommodating variability But this requires aligning the incentives Electricity systems can accommodate a large share of variable generation, through Flexible generation technologies such as hydro Exchange with neighboring systems (regional integration) Energy storage Demand management Images: http://bit.ly/XOPDxl

Accommodating variability But this requires aligning the incentives Electricity systems can accommodate a large share of variable generation, through Flexible generation technologies such as hydro Exchange with neighboring systems (regional integration) Energy storage Demand management Hydro operators need to have the incentives to store water to compensate short-term variability Images: http://bit.ly/XOPDxl

Accommodating variability But this requires aligning the incentives Electricity systems can accommodate a large share of variable generation, through Flexible generation technologies such as hydro Exchange with neighboring systems (regional integration) Energy storage Demand management Regional integration plans need to consider renewable energy technologies Images: http://bit.ly/XOPDxl