Andrés Schuschny - REN21

Andrés SchuschnyDirector of Studies, Olade

REN21 Academy Session: Energy Outlook of Latin America and the Caribbean 2020

All PPTs from the REN21 Academy can be found on the Academy Knowledge Library page on the REN21 website

https://www.ren21.net/knowledge-library/

http://biblioteca.olade.org/opac-tmpl/Documentos/old0450.pdf

How is the Latin America

and the Caribbean Energy

Sector acting to confront

the Covid-19 Pandemic?

http://biblioteca.olade.org/opac-tmpl/Documentos/old0450.pdf

http://bit.ly/ImpactosCovid

Impact analysis of the

COVID-19 pandemic

on the Energy Sector

of Latin America and

the Caribbean

http://bit.ly/ImpactosCovid

http://barometro.olade.org(Spanish version)

Energy Barometer of Latin

America and the Caribbean

2020: The challenges of the

energy sector in the post-

pandemic

http://barometro.olade.org/

https://bit.ly/Panorama2k20

Effect of the Pandemic on the Energy Sector of Latin America and the Caribbean: Objective and methodology

Analyze the effects of the Covid-19 pandemic on the development of the LAC energy sector, for a timespan 2020-2040.

Objective

MethodologyPrepare and compare a forecast energy development scenario for the 2018-2040 period, considering the effects of the Covid-19 pandemic on energy demand and supply, with a reference scenario for the same projection period, based on to energy development policies and plans, established before the pandemic.

The study was carried out for the LAC region, divided into 4 subregions and 2 countries analyzed individually:• Brazil• Mexico• Central America (Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama• Andean Zone (Bolivia, Colombia, Ecuador, Peru and Venezuela)• Southern Cone (Argentina, Chile, Paraguay and Uruguay)• The Caribbean (Barbados, Cuba, Grenada, Guyana, Haiti, Jamaica, Dominican Republic, Suriname and

Trinidad & Tobago).

Simulation and Analysis Model of the Energy Matrix(SAME – OLADE).

Computational tool

Corresponds to demand and supply forecasts made before

the Pandemic (policies and expansion plans in progress).

Premises:

• Implementation of energy efficiency programs

• Greater penetration of electricity in end uses.

• Substitution of liquid fuels of fossil origin for natural gas.

• Substitution of firewood consumption by modern energy

sources.

• Penetration of biofuels in the transport sector.

• Greater penetration of renewable energy sources in the

electricity generation matrix.

• Greater penetration of natural gas in the electricity

generation matrix, displacing other fossil fuels.

It incorporates the effects of the pandemic on the demand

and supply of energy, correlating GDP and energy

consumption.

• IMF GDP Projection (WEO 2020, Oct) for the period

2019 - 2025 were used.

• From 2025 onwards, the latest projected GDP variation

rates were held constant.

• Final energy consumption was projected, using linear

logarithmic correlation functions between this

consumption and the nominal GDP of each subregion.

• For the participation of energy consumption by sectors

and sources, the percentage structure projected in the

BAU scenario was taken, but considering for the years

2020 and 2021, an increase in the participation of the

residential sector.

26.2

-2.0

-4.0

-4.0

-4.5

-5.5

-5.5

-5.6

-5.8

-6.0

-6.0

-6.6

-7.9

-8.0

-8.2

-8.6

-9.0

-9.0

-9.0

-11.0

-11.6

-11.8

-11.8

-13.1

-13.9

-16.0

-25.0

-7.9

-30.0 -20.0 -10.0 0.0 10.0 20.0 30.0

Guyana

Guatemala

Haiti

Paraguay

Uruguay

Costa Rica

Nicaragua

Trinidad & Tobago

Brazil

Dominican Rep.

Chile

Honduras

Bolivia

Cuba

Colombia

Jamaica

Mexico

El Salvador

Panama

Ecuador

Barbados

Grenada

Argentina

Suriname

Peru

Belize

Venezuela

LAC

%

% of GDP variation 2019-2020

2019-2020

(%)

2020-2021

(%)

2021-2022

(%)

2022-2023

(%)

2023-2024

(%)

2024-2025

(%)

Argentina -11.8 4.9 2.5 2.3 2.1 1.7

Barbados -11.6 7.4 3.9 1.8 1.8 1.8

Belize -16.0 8.0 5.0 3.0 2.0 2.0

Bolivia -7.9 5.6 4.3 4.0 3.7 3.7

Brazil -5.8 2.8 2.3 2.2 2.2 2.2

Chile -6.0 4.5 3.2 2.9 2.7 2.5

Colombia -8.2 4.0 3.7 3.8 3.8 3.7

Costa Rica -5.5 2.3 3.4 3.0 3.1 3.2

Cuba -8.0 2.1 2.1 2.1 2.1 2.1

Ecuador -11.0 4.8 1.3 1.7 2.0 2.3

El Salvador -9.0 4.0 3.2 2.8 2.5 2.2

Grenada -11.8 3.0 5.1 5.0 3.4 2.7

Guatemala -2.0 4.0 3.8 3.5 3.3 3.3

Guyana 26.2 8.1 29.5 22.3 2.1 1.1

Haiti -4.0 1.2 1.0 1.1 1.2 1.4

Honduras -6.6 4.9 3.3 3.5 3.6 3.7

Jamaica -8.6 3.6 3.8 2.9 2.5 2.1

Mexico -9.0 3.5 2.3 2.2 2.1 2.1

Nicaragua -5.5 -0.5 2.7 2.0 1.8 2.1

Panamá -9.0 4.0 5.0 5.0 5.0 5.0

Paraguay -4.0 5.5 5.0 4.2 4.1 4.0

Perú -13.9 7.3 5.0 4.9 3.9 3.8

Dominican Rep. -6.0 4.0 5.0 5.0 5.0 5.0

Suriname -13.1 1.5 2.0 2.8 3.0 2.1

Trinidad & Tobago -5.6 2.6 4.2 1.8 1.5 1.5

Uruguay -4.5 4.3 2.5 2.8 2.6 2.4

Venezuela -25.0 -10.0 -5.0 -5.0 -5.0 -5.0

LAC -7.9 3.4 2.6 2.6 2.5 2.4

Source: World Economic Outlook, IMF, October, 2020

Only Guyana will have a GDP growth due to the take off of its oil industry (but not affect the Caribbean results significantly)

Projections the GDP at constant prices

Source: Own elaboration based on IMF data.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

109

US

D o

f 2

010

Brazil, Mexico, Southern Cone and Andean Zone

Brazil Mexico Southern Cone Andean Zone

-5.8 %

-9.0 %

-12.3 %

-8.9%

Fall due to the pandemic

0

50

100

150

200

250

300

350

400

450

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

109

US

D o

f 2

010

Central America and the Caribbean

Central America The Caribbean

-6.4 %

-6.0 %


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

109

US

D o

f 2

010

Years

Latin America and the Caribbean


Projections of GDP at a constant prices LAC

-7.9%

The contraction of LAC's GDP due to the pandemic is equivalent to a setback of around a decade.

Source: Own elaboration based on IMF data.

Projections of the final energy consumption

Source: Energy Outlook of Latin America and the Caribbean 2020, OLADE.

Southern Cone-9 % compared to 2019

-11 % compared to BAU (2020)

Brazil- 7 % compared to 2019- 9 % compared to BAU (2020)

Andean Zone- 10 % compared to 2019


The Caribbean- 3 % compared to 2019- 5 % compared to BAU (2020)

Mexico- 9 % compared to 2019


Central America- 3 % compared to 2019

- 6 % compared to BAU (2020)

Final energy consumption

would fall by 8% compared to

2019 and 10%, compared to

2020 of the BAU scenario

Latin America and

the Caribbean

≈

≈ The arrows (green and red) and the approximate sign indicate the variations with respect to the prospective exercise that OLADE carried out in May 2020

Projection of the sectoral energy consumption

Southern Cone-9 % respecto del 2019

-11 % respecto del BAU (2020)

BrazilAndean Zone-9 % respecto del 2019


The Caribbean

Central America-5 % respecto del 2019


Latin America and

the Caribbean+2% (2019) & +0% (2020BAU)

-8% (2019) & -10% (2020BAU)

-6% (2019) & -10% (2020BAU)

+8% (2019) & +4% (2020BAU)

-6% (2019) & -8% (2020BAU)

-3% (2019) & -8% (2020BAU)+4% (2019) & +3% (2020BAU)

-8% (2019) & -12% (2020BAU)

-8% (2019) & -12% (2020BAU)

0% (2019) & -2% (2020BAU)

-12% (2019) & -14% (2020BAU)

-11% (2019) & -14% (2020BAU)

+1% (2019) & +2% (2020BAU)

-11% (2019) & -13% (2020BAU)

-11% (2019) & -13% (2020BAU)

Mexico-5 % respecto del 2019

-7 % respecto del BAU (2020)-2% (2019) & -2% (2020BAU)

-10% (2019) & -12% (2020BAU)

-11% (2019) & -12% (2020BAU)

+1% (2019) & +0% (2020BAU)

-10% (2019) & -11% (2020BAU)

-9% (2019) & -12% (2020BAU)

-12% (2019) & -14% (2020BAU)

-8% (2019) & -10% (2020BAU)

-6% (2019) & -8% (2020BAU)

-11% (2019) & -12% (2020BAU)

-8% (2019) & -12% (2020BAU)

-11% (2019) & -13% (2020BAU)

-10% (2019) & -12% (2020BAU)


The green arrows indicate the variations with respect to the prospective exercise that OLADE carried out in May 2020

Projection of the electricity generation


-8 % compared to BAU (2020)(NG falls)

Brazil-4 % compared to 2019-7 % compared to BAU (2020)(cae GN, Carbon Mineral)

Andean Zone-6 % compared to 2019

-9 % compared to BAU (2020)(NG falls)

The Caribbean1 % compared to 20193 % compared to BAU (2020)(Coal and Diesel – Fuel,NCRE increases)

Mexico-7 % compared to 2019

-10 % compared to BAU (2020)(NG and Coal fall)

Central America-1 % compared to 2019

-6 % compared to BAU (2020)(Diesel – Fuel falls)

Electricity Generation would suffer

a drop of 5% compared to 2019 and

8%, compared to the 2020 BAU

scenario(NG, Diesel – Fuel and Coal

fall)

Latin America and

the Caribbean

≈

≈

≈The arrows (green and red) and the approximate sign indicate the variation with respect to the prospective exercise that OLADE carried out in May 2020


Projection of the CO2 emissions



Brazil-12 % compared to 2019-14 % compared to BAU (2020)

Andean Zone-11 % compared to 2019


The Caribbean-5 % compared to 2019-6 % compared to BAU (2020)

Mexico-11 % compared to 2019


Central America--9 % compared to 2019


CO2 emissions would fall by

11% in 2020, compared to the

2019 and 13% compared to

2020 of BAU scenario

Latin America and

the Caribbean


The arrows (green and red) indicate the variation with respect to the prospective exercise that OLADE carried out in May 2020

Renewables: 59.4%Renewables: 58.5%


≈

In 2017, hydro power projects received 46% of flows, 19% solar, 7% wind, and 6% geothermal. Latin America and the Caribbean received 21% of the total.

Source: OECD & IRENA (2020), Renewable Energy Public Investments Database

0

5

10

15

20

25

0

5

10

15

20

25

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Average in

vestmen

t per p

roject

(USD

millio

n)

Inte

rnat

ion

al f

inan

cial

flo

ws

to

dev

elo

pin

g co

un

trie

s (U

SD b

illio

n)

Multiple/other energy sourcesGeothermal energyWind energySolar energyHydropowerLatin America and the Caribbean

Source: Economic Commission for Latin America and the Caribbean (2018)

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Andrés Schuschny - REN21

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