Fast-tracking Latin America’s energy transition

Fast-tracking Latin America’s energy transition

On Tuesday 22 October, energy industry leaders gathered in London for an in-depth discussion on fast-tracking the energy transition in Latin America. The UK-Latin America Energy Transition Summit: Powering Potential - hosted by Canning House, with sponsorship from ERG International Group, featured two distinguished panels of experts and a fireside chat, exploring the challenges and opportunities facing the region as it strives to balance energy security, sustainability, and economic development.

The tone of the conversation was both urgent and optimistic, as speakers emphasised the critical role renewable energy will play in shaping Latin America's future. Following words of welcome from Jeremy Browne, Canning House’s CEO, ERG International Group’s Director for Latin America, Juan Jimenez Perez, kicked off the event by emphasising the role of renewables in securing a future “we can be proud of.”

He also highlighted one of ERG’s latest achievements – securing deals for 400 MW of solar power in Colombia, through a partnership with Lica Energía Renovables; one project among several ERG is producing, pushing for decarbonisation of energy, transport and other industries.

Panel One, Latin America’s Command in Global Energy Security: Opportunities and Challenges, chaired by Tania Arora (Baker McKenzie) centred its discussions on three main pillars: energy security, the path to decarbonisation, and navigating geopolitical and regulatory complexities.

Adrian del Maestro (Aecom) highlighted the "energy trilemma" of balancing sustainability, affordability, and security, noting that events like COVID-19 and the Ukraine invasion have caused commodity price inflation, complicating energy transitions. He emphasized the need for regulatory stability to attract investment and pointed to LatAm’s potential in renewables and critical minerals like copper and lithium, essential for global electrification.

Oscar Rincón (Price Forbes) stressed that many LatAm countries are still building the infrastructure needed for energy security before focusing on decarbonisation. He emphasized the importance of resilience against shocks like natural phenomena and population growth, and the need for a stable grid and resilient supply chains.

Germán Beckmann (Harbour Energy) discussed the role of oil and gas, especially in Mexico and Argentina, where political changes can reshape the energy mix. He noted Mexico's potential shift toward renewables and Argentina’s vast oil, gas, wind, and solar potential, especially under the country’s new investment incentive regime.

Ajay Chaudhary (Mott Macdonald) highlighted challenges in financing renewable energy, especially hydropower, and stressed the need for LatAm to develop 8GW of renewable capacity annually to reach net-zero by 2050. He also emphasized the importance of energy storage for a reliable energy transition and called for robust policy frameworks, pointing to Peru and Chile as examples of success.

In the fireside chat, Eman Martin-Vignerte (Bosch UK), interviewed by James McKeigue (Fastmarkets), discussed the geopolitical and technological challenges facing Latin America, as well as the region’s potential to play a crucial role in the global energy transition.

Latin America, despite its heavy political reliance on oil and gas, is uniquely positioned to become a key player, strong in both green energy and oil and gas, as well as being a region adept at maintaining relationships with both the U.S. and Europe in the West, and powers like China and Russia to the East, she said.

On hydrogen, Eman emphasized that the main challenge lies in the high cost of production. Hydrogen could be vital in decarbonising transport, but the current focus should be on building a robust hydrogen economy, regardless of its “colour” (Green – produced with renewable energy – or otherwise).

Latin America currently lacks a consistent policy framework to allow the technology to flourish, deterring investors and creating a "zig-zag" policy landscape. The region's low carbon footprint in production is an opportunity, but consistent skills development is crucial.

Eman also discussed the need for collaboration on battery technology, highlighting Bosch's partnerships and the critical role of expertise. Addressing political risks in Latin America, she pointed out that governments in the region, although in a political grey area, are often receptive to business needs, making it easier to engage compared to established political systems.

Panel Two, Collaborative Approaches to the Energy Transition in the UK and Latin America, moderated by Carlos Pires (Eversheds Sutherland) discussed the role of the UK in supporting Latin America's energy transition, geopolitical challenges, regulatory complexities, and investment opportunities.

Gabriel Brasil (Control Risks) highlighted the challenging global geopolitical landscape, driven by U.S.-China competition, protectionism, and ongoing conflicts in Gaza and Ukraine. Latin America, as a price taker, is vulnerable to these shocks. However, despite the unfavourable backdrop, Latin America has a proven track record in renewables and is adept at navigating these geopolitical challenges. He noted the UK's agreements with Chile and Brazil to fund green hydrogen projects, bringing both financial and technical expertise to the region.

Gustavo Cedeño (ERG International Group) focused on regulatory issues, stressing the diversity of energy policies across Latin America, making it difficult for investors to view the region as a singular entity. He suggested the UK could help by sharing policies and best practices, especially as renewables reshape Latin America’s energy markets. Like those in Panel One, he emphasized the need for stable, long-term regulatory frameworks to attract investment, particularly given the long lifespan of energy projects.

Miguel Valderrama (EDF Renewables) discussed green financing, noting the growing appetite for investment in clean energy, with US$1.8 trillion invested globally in 2023. He highlighted opportunities for green finance across multiple sectors in LatAm, including steel and cement, and stressed the importance of developing low-carbon infrastructure. While regulatory stability is key, he acknowledged that some areas have faced political instability, which can deter investment.

Following all this discussion, Fiona Clouder, CEO of ClouderVista and a Trustee of Canning House, spoke briefly to sum up the afternoon’s wide ranging discussions; and Jeremy Browne closed the conference, inviting guests to join a networking reception.

Canning House thanks ERG International Group for their support of the UK-Latin America Energy Transition Summit, our panellists for their insights, and our audience for their engagement and interest.