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Chapter 3: Environmental policies, goals, and objectives


Wind turbines against a beautiful sunset in the central lowlands of Panama.


geothermal,


and


greater


uptake


of photovoltaics in


electrification. Greater emphasis on renewable energy will also make the region more self-sufficient, especially for countries that are net importers. While the option for renewables is present for development, one of the concerns is reliability and consistency (van der Zwaan et al. 2015). This will need to be addressed and perhaps a mixture of sources can reduce this challenge.


Greater uptake of renewable energy sources would require policies that promote investment in renewables with the accompanying technology changes to allow the transition and uptake of renewable sources into the national grid.


Credit: Shutterstock/Gualberto Becerra 3.2.3 Towards affordable and clean energy


The utilization of energy in LAC is dependent on geography, but generally Latin America harnesses its energy needs from a matrix of energy sources including fossil fuels, hydroelectricity and other forms of renewables. Some of the world’s largest natural gas reserves are found in Latin America, including Venezuela and Colombia, while others, such as Guyana and Suriname, are aggressively pursuing exploration. In contrast, the Caribbean SIDS rely on imported fossil fuels to fulfil their energy needs. In the Caribbean region, costs of power generation are consistently high – typically USD 390 per MWh across the region (IDB 2014).


Access to electricity in the region is currently 95 per cent (IDB 2014). However, despite this achievement, according to IDB (2014), there are still 30 million people without access, and addressing this deficiency will require planning and coordination. Meeting 100 per cent will mean providing connection services to the most rural and inaccessible areas, which will require larger investments and innovative solutions. Many untapped sources of renewable energy remain in the region, including


marine


This development, and further expansion to meet the energy needs and the projected demands in LAC, must be underpinned by favourable regulatory environments and long-term political frameworks to encourage clean energy deployment. Consistent and credible long-term energy policies that are integrated with emphasis on both targets and incentives are a strong signal for private investment (Mundaca 2013). This must be accompanied by an investment environment that is deemed fair, transparent, accountable, and reasonable.


Regional examples of well-designed policies include the Programme of Incentives for Alternative Electricity Sources (PROINFA) in Brazil (Dutra and Szklo 2008), Chile’s energy market liberalization, Nicaragua’s tax exemptions for renewable energy equipment, Uruguay’s tendering system, Peru’s utility regulation prioritizing renewable


energy


sources, Mexico’s target of a 35 per cent renewable energy share in overall power production by 2024, and Eastern Caribbean countries providing tax incentives for photovoltaic installation in homes.


renewables,


Attracting investment in the energy sector will require reducing the barriers to entry, especially in countries with vertical integrated monopolies such as those in the Caribbean islands (Timilsina and Shah 2016). In contrast, Mesoamerica and South America have a more liberalized policy in the form of wholesale power market accompanied by grid access.


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