Energy Challenge in the Current Global Scenario and Investment Opportunities in the Region

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1 Energy Challenge in the Current Global Scenario and Investment Opportunities in the Region Fernando Ferreira Executive Secretary LATIA London, England June 4, 2015

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3 Content Fossil energy resources in Latin America and the Caribbean, Development Opportunities Renewable energy resources in Latin America and the Caribbean, Development Opportunities Energy Development stage by 2030 with increased use of renewables (OLADE REMAP Study - IRENA)

4 Fossils Resources Miles de millones de barriles Evolution of Proven Global Oil Reserves Total US & Canada Total Mexico, S. & Cent. America Total Europe & Eurasia Total Middle East Total Africa Total Asia Pacific

5 Fossils Resources Trillones de Metros Cúbicos 200 Evolution of Proven Global Natural Gas Reserves Total US & Canada Total Mexico, S. & Cent. America Total Europe & Eurasia Total Middle East Total Africa Total Asia Pacific

6 Fossil Resources in Latin America and the Caribbean Reserves shares of fossil resources Development opportunities CO2 Capture and Storage Generation efficiency Environmental Management Natural gas penetration in Residential Sector Power generation replacing other sources Utilization of Associated Gas Proven reserves in Latin America and the Caribbean 2013 (Mboe) Oil ,39 Natural gas ,86 Coal ,30 Total ,56 Energy consumption efficiency Extractive Industries Transparency Unconventional Reserves exploitation Source: OLADE - SIEE (Energy-Economic Information System

7 Renewable Resources Renewable resources potential Latin America and the Caribbean 2013 Tapping the potential 2.25% Geothermal 1.2% Wind 22.8% Hydropower Hydro power Installed Capacity (MW) LAC Geothermal Potential (MW) ,00 Geothermal Installed Capacity (MW) 1.576,00 Wind Potential (MW) ,00 Wind Installed Capacity (MW) 6.712,00 Hydropower Potential (MW) ,84 Hydropower Installed Capacity (MW) ,61 Source: OLADE - SIEE (Energy-Economic Information System

8 Renewable Resources LAC: 23% utilization of the hydropower potential

9 Access to modern energy Electricity coverage in Latin America and the Caribbean (2013)

10 Access to Energy Average electricity coverage of 90.34% (2012) Approximately 30 million people without access to electricity an additional power capacity of about 16,000 MW would be required Investment in generation costs Without costs of transmission and distribution infrastructure and operating costs

11 Access to Energy Energy consumption per capita Consumption per capita LAC: 8 boe / hab. World: 14 boe / hab. USA: 50 boe / hab. Japan: 26 boe / hab. Europe: 22 boe / hab.

12 Access to Energy About 10 million people use biomass for cooking The World Health Organization estimates that pollution inside homes due to inefficient use of biomass for cooking, could result in 1.5 million premature deaths per year around the world, until 2030; greater than that estimated for malaria, tuberculosis and HIV.

13 ENERGY DEVELOPMENT FORECAST IN LAC Construction of two plausible scenarios of regional energy development by 2030, with 2011 base year Business as usual scenario (BAU) It represents a prospective trend of the energy mix in each of the LAC countries REmap scenario It considers a faster penetration of renewable energy sources in the regional energy matrix. Based on REMAP-LAC study OLADE-IRENA, 2014

14 Business as usual scenario (BAU) MAIN ASSUMPTIONS FOR THE ANALYZED SCENARIOS Growing economy and population. Policies to improve: coverage, autarky and energy security No changes are expected Economic performance on environmental aspects The Greatest hydrocarbon penetration is natural gas Depletion of fossil sources has not been considered The dominance of hydropower in electricity generation matrix is preserved. Replacing traditional biomass for modern energy sources in the residential sector. Based on REMAP-LAC study OLADE-IRENA, 2014

15 REMAP scenario MAIN ASSUMPTIONS FOR THE ANALYZED SCENARIOS Specific versatility - End use Replacing traditional biomass Penetration of electricity and biofuels Penetration of electricity in the industrial sector Technological innovation in end-use technologies Depletion of fossil sources has not been considered The increase in the consumption of electricity will be supplied for power generation Decreased imports of fossil fuels Based on REMAP-LAC study OLADE-IRENA, 2014

16 Forecasting of final energy consumption for LAC

17 Prospective of electricity generation by source for LAC Source: SIEE-OLADE, 2015 / Estudio REMAP-LAC, OLADE-IRENA, 2014

18 Prospective of the total energy supply for LAC Source: SIEE-OLADE, 2015 / Estudio REMAP-LAC, OLADE-IRENA, 2014

19 Forecasting of primary production of fossil fuels for LAC Source: SIEE-OLADE, 2015 / Estudio REMAP-LAC, OLADE-IRENA, 2014

20 Comparison of indicators of LAC energy matrix 25% 26% 32% Mbep

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