Are the electricity expansion plans in Latin America and the Caribbean consistent with Paris Agreement targets? A recent study suggests a massive transition to natural gas will only delay the problem.

Natural gas plant in San Antonio, province of Tarija, Bolivia. Photo by AIZAR RALDES / AFP
Natural gas plant in San Antonio, province of Tarija, Bolivia. Photo by AIZAR RALDES / AFP

The Latin American and the Caribbean (LAC) power sector has the largest share of hydro in the world. However, this does not mean that the Paris Agreement will be easily met in this region, especially because of the role held by gas-powered electricity power plants.

In an article recently published in Environmental Research Letters, we assess committed CO2 emissions from existing and planned power plants in LAC. Committed emissions are the carbon emissions that result from the operation of fossil-fueled power plants during their typical lifetime. The study investigates whether the electricity expansion plans in the region are consistent with the temperature targets of the Paris Agreement.

 

More than half of all fossil power plants will have to be stranded if the region is to meet the objectives of the Paris agreement

The power plants operating in the region are on average 18 years old, so they can be used for 15 or 20 more years. According to our estimates, they will emit around 7 GtCO2 during their typical lifetime. By comparison, the average Intergovernmental Panel on Climate Change (IPCC) estimates to keep the global temperature increase below 2°C and as close to 1.5°C as possible is lower. To meet the Paris Agreement temperature target, the emissions from the LAC power sector should not exceed about 6 GtCO2. Complying with the Paris Agreement may require the region to “strand” or close down about 15% of installed operational capacity before they reach their typical lifetime.

On top of already operating plants, there are hundreds of new fossil power plant projects in the region, with more than one hundred already under construction – most of them natural gas-based. If all these projects are built, they will emit almost an extra 6 GtCO2 during their typical lifetime. In other words, if all planned plants go into operation, more than half of all fossil power plants will have to be abandoned to meet the objectives of the Paris agreement. This risk cannot be ignored in a region that invests US$21 billion in electricity generation per year.

Another interesting finding is that more than half (62%) of the committed emissions from planned plants will come from natural gas-fired plants. In light of this, massive investments in natural gas do not seem to be the solution for an energy transition to renewable energies consistent with climate targets.

 

Governments need to plan for non-conventional renewable energy and to foster long term strategies for the power sector

The key to that problem lies in the sensible planning of long-term expansion trajectories that clearly translate into short-term decisions. Governments in the region need to recognize the fact that the Paris Agreement translates into a goal of zero carbon net electricity generation by 2050. Achieving that goal requires to formulate a long-term strategy with sectoral plans that translate into that goal. For example, some countries have already decided to phase-down the existing coal-fired power plants and thus have anticipated the likely social, technical and economic repercussions of premature closure of fossil fuel-fired power plants. For example, Chile has recently announced the closure of coal-fired power plants to make way for non-conventional renewable energies in order to make the country carbon neutral by 2050.

A massive transition to gas would lead us to the same situation 20 years from now. The power sector needs to be completely decoupled from the fossil fuel industry in order to allow the introduction of modern decentralized solutions.

The good news is that renewable energy is already the cheapest option in many parts of the world. The potential in Latin America and the Caribbean is enormous. Chile, Mexico, and Peru have some world records for the cheapest photovoltaic electricity. Renewable energy creates new jobs and stimulates direct foreign investment. Decarbonizing electricity generation is feasible and only requires technical planning and political commitment.

 

 

The opinions expressed on this blog are those of the authors and do not necessarily reflect the official position of their institutions or of AFD.

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