The document analyzes energy policies and NDCs in Latin America and the Caribbean through 2030. It finds that: 1) Current policies and expansion plans will not meet conditional or unconditional NDC targets for reducing GHG emissions. 2) More aggressive sustainable energy development, as modeled in the ECN scenario, is needed to meaningfully contribute to NDC fulfillment. 3) As a region, LAC should reduce GHG emissions 25-30% by 2030 compared to business-as-usual to align with Paris Agreement goals.

1. Energy Policy and NDCs in Latin America
and the Caribbean
Alfonso Blanco Bonilla
2 October, 2019

2. Contents
1. Background
2. Study Overview
3. Main results for LAC.
4. Conclusions
http://biblioteca.olade.org/opac-tmpl/Documentos/old0423.pdf

3. Through a prospective study of the regional energy sector, with emphasis on the
electricity subsector, for the period 2015 - 2030, we analyze the effectiveness of current
energy development policies and plans, to contribute to the fulfillment of NDCs and
propose strategies based on sustainability criteria, which will guarantee this contribution.
2. Study Overview
General Objective

4. 2. Study Overview
Geographical scope of the Study
Mexico
Central America
Andean subregion
Southern Cone
The Caribbean
Brazil

5. 2. Study Overview
Summary of subregional goals according to the NDCs of LAC countries
Subregion
Overall goals
Unconditional Conditional
Brazil
Reduce GHG emissions by 43% by 2030,
compared to 2005 emissions.
Mexico
Reduce 25% of its GHG and pollutant emissions
below the BAU by 2030.
Reduce GHG emissions up to 40% below the BAU by
2030.
Central America
Reduction of GHG emissions of the order of 11%
by 2030 compared to the BAU scenario.
Reduction of GHG emissions of the order of 22%
compared to the BAU.
Andean subregion
Reduce GHG emissions between 20 and 25% by
2030 compared to the BAU scenario.
Reduce GHG emissions between 30 and 45% by
2030 compared to the BAU scenario.
Southern Cone
Reduce GHG emissions between 10 and 25% by
2030 compared to the BAU scenario.
Reduce GHG emissions between 20 and 40% by
2030 compared to the BAU scenario.
The Caribbean
Reduce GHG emissions between 5 and 30% by
2030 compared to the BAU scenario.
Reduce GHG emissions between 20 and 40% by
2030 compared to the BAU scenario.

6. 2. Study Overview
Methodology
Energy
diagnosis of the
base year
Projection of
energy demand
Construction of
the baseline
scenario (BAU)
Compilation of
country
expansion plans
Construction of
the Current
Policy Scenario
(EPA)
Analysis of the
NDCs of the
countries
Projection of
GHG emissions,
BAU and EPA
scenarios
Comparison of
emission
reduction
Scenario / NDCs
Scenario
compatible
with NDCs
Conclusions
Sustainable
Energy
Development
Measures (DES)
NDCs-oriented
scenario
construction
(ECN)
No
Yes Robustness
to CC and
unit fuel
prices
Yes
No

7. 2. Study Overview
IT Tools

8. 2. Study Overview
Sub-regional workshops for premises validation
Sub-regional workshop for
Mexico and Central America
San Salvador, El Salvador,
September 18, 2017
Subregional Workshop for the
Andean Subregion
Quito, Ecuador, September 12,
2017
Sub-regional workshop for
Brazil and the Southern Cone
Montevideo, Uruguay,
September 25, 2017
Subregional Workshop for the
Caribbean
Port of Spain, Trinidad and
Tobago, October 17, 2017

9. 2. Study Overview
Premises of the BAU, EPA and ECN scenarios
Baseline scenario
 Trend of the historical evolution of final energy
consumption.
 Technical coefficients of the energy supply matrix
of the base year.
 Demand and supply of energy according to the
referential plans of expansion of the Energy Sector.
Premises
Current policy scenario
Scenarios
Scenario oriented to the fulfillment of the NDCs (ECN)
 Energy efficiency measures in the final consumption
sectors.
 Reduction of the percentage of electrical orders
 Greater use of biofuels in transport
 Greater penetration of renewable energy sources in
electricity generation.

10. Study Overview
Sustainable energy development measures simulated in the ECN scenario
Proposed measures for
the final consumption
sectors:
 Greater penetration of electricity in the Transport, Industrial,
Residential and Commercial sectors.
 Technological improvement in consumer devices (more efficient
equipment)
 Replacement of wood consumption by modern sources (LPG, NG
and Electricity)
 Greater penetration of biofuels in the transport sector
 Increased use of solar collectors for water heating
Proposed measures
for the electricity
sector
 Reduction of total transmission and distribution losses to a
maximum of 10%.
 Greater use of hydroelectric potential
 Increased penetration of NCRE in the power generation matrix
(Wind, Solar PV, Geothermal, Biomass).
 Replacing mineral coal and oil with natural gas

11. 3. Main findings of the study
2015 2030 BAU 2030 EPA 2030 ECN
Electricidad 784 1,376 1,323 1,559
Solar térmica 0 0 0 117
Biomasa 767 1,042 1,022 839
Carbón mineral y coque 174 256 255 213
Gas natural 590 834 808 709
Petróleo y derivados 2,261 3,462 3,355 2,482
TOTAL 4,576 6,971 6,762 5,919
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Mboe
49% 50% 50%
42%
13% 12% 12%
12%
4% 4% 4%
4%
17% 15% 15%
14%
2%
17% 20% 20%
26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2030 BAU 2030 EPA 2030 ECN
%ofShare
Year and scenario
Electricidad
Solar térmica
Biomasa
Carbón mineral y coque
Gas natural
Petróleo y derivados
Projection and structure of the Final Energy Consumption for
LAC
Source: Energy Policy & NDCs in LAC, OLADE, 2018, http://biblioteca.olade.org/opac-tmpl/Documentos/old0423.pdf

12. 3. Main findings of the study
Projection and renewable power generation in LAC
2015 2030 BAU 2030 EPA 2030 ECN
Nuclear 33,277 58,698 69,697 69,697
Solar 5,763 10,025 68,720 121,053
Eólica 39,521 69,567 298,421 404,047
Geotermia 11,861 19,989 25,240 67,431
Biomasa 69,732 122,757 160,159 216,250
Carbón mineral 112,917 199,082 191,335 111,433
Diesel-Fuel 178,285 314,406 19,163 0
Gas natural 427,355 756,844 699,272 707,327
Hidroeléctrica 686,983 1,215,196 1,149,101 1,266,606
TOTAL 1,565,695 2,766,565 2,681,108 2,963,845
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
GWh
52% 52%
63%
70%
48% 48%
37%
30%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2030 BAU 2030 EPA 2030 ECN
%ofShare
Year and scenario
Renovable No renovable
Source: Energy Policy & NDCs in LAC, OLADE, 2018, http://biblioteca.olade.org/opac-tmpl/Documentos/old0423.pdf

13. 3. Main findings of the study
Projection and renewability of the total energy supply in LAC
2015 2030 BAU 2030 EPA 2030 ECN
Otras renovables 57 109 296 608
Biomasa 1,041 1,477 1,542 1,590
Hidroenergía 471 834 775 856
Nuclear 64 113 133 133
Carbón mineral y coque 369 594 578 396
Gas natural 1,895 2,881 2,749 2,557
Petróleo y derivados 2,634 4,161 3,743 2,852
TOTAL 6,532 10,169 9,816 8,992
0
2,000
4,000
6,000
8,000
10,000
12,000
Mboe
24% 24% 27%
34%
76% 76% 73%
66%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2030 BAU 2030 EPA 2030 ECN
%renewability
Year and scenario
Renovable No renovable
Source: Energy Policy & NDCs in LAC, OLADE, 2018, http://biblioteca.olade.org/opac-tmpl/Documentos/old0423.pdf

14. 3. Main findings of the study
Reduction of total GHG emissions for LAC
7.0%
16.6%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
Total projection period
EPA/BAU ECN/BAU
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2015 2020 2025 2030
ktofCO2e
Years
BAU EPA ECN
10.5%
25%
29.5% 30%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Year 2030
EPA/BAU NDCs min ECN/BAU NDCs max
Source: Energy Policy & NDCs in LAC, OLADE, 2018, http://biblioteca.olade.org/opac-tmpl/Documentos/old0423.pdf

15. 3. Main findings of the study
Sensitivity to the effects of Climate Change for LAC
7.0%
16.6%
15.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
%reductionofGHGemissions
Scenario Relationship
Total projection period
EPA/BAU ECN/BAU ECN(RCP8.5)/BAU(RCP8.5)
10.5%
29.5%
27.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
%reductionofGHGemissions
Scenario Relationship
Year 2030
EPA/BAU ECN/BAU ECN(RCP8.5)/BAU(RCP8.5)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2015 2020 2025 2030
ktofCO2e
Years
BAU BAU(RCP8.5) EPA ECN ECN(RCP8.5)
Source: Energy Policy & NDCs in LAC, OLADE, 2018, http://biblioteca.olade.org/opac-tmpl/Documentos/old0423.pdf

16. 3. Main findings of the study
Levelized costs of electricity generation (LCOE) and investment
costs for LAC
0
20
40
60
80
100
120
140
2015 2030 (precios crecientes) 2030 (precios constantes)
US$/MWh
LCOE
Escenario BAU Escenario BAU(RCP8.5) Escenario EPA Escenario ECN Escenario ECN(RCP8.5)
471,529
559,811
728,932
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Esceanrio BAU Esceanrio EPA Escenario ECN
MMUS$of2015
Total investment cost
Source: Energy Policy & NDCs in LAC, OLADE, 2018, http://biblioteca.olade.org/opac-tmpl/Documentos/old0423.pdf

17. 4. Conclusions
1. The disparity in the formulation of the NDCs of the countries makes it difficult to compare the goals and identify the
baselines of emissions.
2. The NDCs are generally of an integral type, with respect to the anthropogenic activities in the country, being
necessary to identify in some way the expected contribution of the energy sector.
3. According to the results of the study, the percentages of achieved GHG emission reductions, by 2030, regarding a
BAU scenario, by simulating the current policies and expansion plans of the energy sector, would be below the targets
established in the NDCs. Therefore, this would not contribute effectively to the fulfillment of the commitments acquired
under the Paris Agreement (COP21).
4. It is necessary to formulate policies and implement much more forceful sustainable energy development plans, such
as those simulated in the ECN scenario of the study, in order to contribute in a consistent manner to the fulfillment of
the NDCs.
5. As a region, LAC should achieve a percentage reduction of GHG emissions by 2030 between 25 and 30%, with
respect to the baseline scenario (BAU), to be tuned as a region with the objectives of the Paris Agreement.
6. Although there is an effect of the CC on the effectiveness of DES measures to reduce GHG emissions, this effect is
still minimal by 2030, even for the more drastic climate scenario of the IPCC (RCP8.5).
7. Although the penetration of NCRE is favorable in terms of LCOE, there is an investment required for its
implementation.

18. Thank you very much