IEA recognizes many opportunities but also challenges in its first analysis of the region.
For the first time, the International Energy Agency (IEA) has examined the energy sector of all 33 Caribbean and Latin American countries. According to the report released today, the region is already a leader in the field of renewable energies, with a 60 percent share of its energy mix. Hydropower plants play an important role in this. In addition, there is great potential for wind and solar power in Brazil, Mexico, Chile, and Argentina, for example.
At the same time, the extensive oil and natural gas resources offer the opportunity to contribute to the diversification of global supply in the medium term. This also applies to the production of biofuels, which are already used on a large scale in Brazil to transport goods by road. Latin America and the Caribbean also have a third of the world’s deposits of lithium, copper, and silver, minerals needed for the energy transition: Lithium for batteries, copper for electrical cables, and silver to produce solar panels.
There are also significant deposits of rare earths. According to the IEA, Brazil accounts for a fifth of global reserves. Rare earths are currently only mined to a small extent in South America’s largest country, with just 80 tons mined in 2022, according to data from the United States Geological Survey (PDF). This could contribute to the diversification of supply chains, particularly in the so-called heavy rare earths, which are mainly mined in China and Myanmar.
The IEA sees the income gap, one of the highest in the world, as one of the region’s challenges. All people must be given access to clean energy. In addition, many sectors, such as industry and transportation, still rely on fossil fuels.