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Latin America: The Link Between Energy Transformation and Prosperity

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High-level energy and climate decision makers from Latin America and the Caribbean underlined the importance of low-carbon energy policy to securing stable, long-term prosperity across regional economies, during a webinar co-hosted by the International Renewable Energy Agency (IRENA) and the Latin American Energy Organization (OLADE).

The virtual meeting entitled Accelerating Latin America’s Energy Transformation: RE and Economic Recovery was built around the recent analytical work featured in the Agency’s Global Renewables Outlook report, Power Generation Cost 2019 and the Post-Covid Recovery report – all of which reinforce the centrality of energy transformation to positive long-term economic outcomes in Latin America and around the world.

The discussion sought to deepen regional decision makers’ understanding of the strengthening economic case for more purposeful energy transformation action, highlighting the socio-economic benefits of a renewables-based energy system. The virtual meeting also served as an important platform for an exchange of knowledge and experience between regional governments and development partners. Representatives from Panama, Uruguay and the Global Wind Energy Council participated alongside IRENA and OLADE and the UK’s Regional COP 26 Ambassador for Latin America and the Caribbean.

Latin America has been severely affected by the Covid-19 pandemic, with persistent oil market volatility further compounding regional economic challenges. As region decision makers look to identify a pathway to recovery, Fiona Clouder, UK COP26 Regional Ambassador for Latin America and the Caribbean said the region’s recovery had to be green and sustainable, noting that it must be underpinned by renewable energy.

“In our changing world, building a green recovery and a sustainable future is even more important,” she said in opening remarks. “With vision, ambition and natural resources, countries in Latin America are well placed to transition to low carbon economies, using renewable energy as part of that transformation. COP26 gives us an opportunity to work together to share ideas and best practice to address the challenges of climate change and build a better future.”

In his opening remarks, Mr. Alfonso Blanco, Executive Secretary of OLADE stressed the importance of cooperation and highlighted the role of international and multilateral organisations to support the development of strategies for the economic recovery of the region, with the energy sector as the main driver during this process.

“We need to increase [renewable energy] investments throughout our region to reactivate the economy,” he said. “Between OLADE and IRENA, we have to start working on the necessary strategies to reactivate the regional economies and put the energy sector as the main driver of that recovery. In our region, there is a great potential in terms of energy resources, and therefore, the post-pandemic regional economies have the potential to be reactivated through the energy sector.”

Latin America is among the most dynamic renewable energy marketplaces in the world. Close to USD 120 billion of renewable investments were made between 2010 and 2015, placing several countries in Latin America among the top 10 largest renewable energy markets globally. Today, the region boasts around 200 gigawatts (GW) of installed renewable capacity, accounting for more than half of power capacity and a quarter of total primary energy.

Yet the region’s full potential remains unexplored. IRENA estimates that over 90 per cent of the region’s potential remains untapped and investment needs in the region are estimated at USD45 billion per year between now and mid-century – an increase of more than 10 per cent over current plans and policies. A regional initiative coordinated by OLADE sets a regional goal of reaching at least 70 per cent of renewable energy in electricity in by 2030.

Gauri Singh, Deputy Director-General of IRENA, said attracting the increased investment would offer the region strong returns, both in the short and long-term. “Latin America is tackling the economic toll of the pandemic and the World Economic Forum suggests the region’s economy is poised to contract in 2020,” she said, “meaning forward thinking energy and economic policy making is critical.”

“Accelerating the renewable energy transformation in Latin America and the Caribbean would create more than 3m jobs across the region by 2050,” she continued. “IRENA’s Transforming Energy Scenario offers the region the scope to develop economic returns of between 3 and 8 dollars on every dollar invested in the transformation.”

Many countries in the region have already taken positive steps towards economic recovery built around an accelerated energy transformation and the prioritization of low-carbon technologies. Serving as a platform to build regional understanding of the measures and policies being implemented, the discussion heard representatives from Panama and Uruguay share their plans and experiences.

Ms Guadalupe González, Director of Electricity, Secretary of Energy, Panama reinforced her country’s recognition of the socio-economic benefits. She noted that Panama has developed the Energy Transition Agenda 2030, built around five important pillars for renewable energy deployment that not only discuss the implementation of low-carbon technologies but also social aspects to improve energy access, job creation, role of women in the energy sector, building capacities on renewables, and the empowerment of the energy consumers.

Mr Fitzgerald Cantero, National Energy Director, Uruguay highlighted his country is following a pathway towards the decarbonisation of the economy starting with the power sector, which reached 98 per cent of renewable energy generation in 2019.He noted that Uruguay’s variable generation, particularly from wind energy, has left the country with a power surplus that can be used to support cross-border trade of power, promote the use of e-mobility and the potential production of green hydrogen for transport, industry and international trade.

Regional energy policy measures designed to aid the economic recovery following the COVID-19 pandemic were summarized as the development of more flexible power grids, energy efficiency solutions, electric vehicle charging for electric vehicle deployment, energy storage, interconnected hydropower, green hydrogen, and other technology investments consistent with long-term energy and climate sustainability.

IRENA

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As fuel prices rise, companies look to energy efficient solutions

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With fossil fuel prices reaching record highs, companies around the world are focusing on energy efficiency to save money and reduce the emissions driving the climate crisis.

Research shows that a safe future below 1.5°C requires the world to cut 30 gigatonnes greenhouse gas emissions (CO2) annually by 2030. Carbon emissions need to be cut by building smart cities and managing land and resources more efficiently.  Transport and buildings are among the largest contributors.

– a United Nations Environment Programme (UNEP)-led global effort supporting developing countries to move their markets to energy-efficient appliances and equipment.

“This improvement in energy efficiency will also reduce electricity bills for companies and support the scale-up of renewable energy,” he added.

Improving energy efficiency

Energy efficiency can take many forms, with U4E focusing on lighting, refrigeration, air conditioning, distribution transformers and electric motors. 

LED lamps, for example, are not only more efficient than conventional lamps, but they also last 20 times longer. Research shows that by switching to LED lighting in 156 developing countries, over 110 terawatt-hours (TWh) could be saved by 2030, nearly the same as the current electricity consumption of the Netherlands.

Similarly, by increasing efficiency in distribution transformers, which adjust voltage and current and are placed between the power plant and the consumer, 60 TWh could be saved by 2040, or the same as the current consumption of the Czech Republic.

“Half of the near-term reductions in emissions in the energy sector can be achieved through energy efficiency, for example, by using more energy-efficient appliances and lighting and more efficient motors,” said Miriam Hinostroza, Head of the Global Climate Action Unit, at UNEP’s Energy and Climate Branch.

Cost effective solutions

Companies have found that energy efficiency is a double win, it’s good for their bottom line but it’s also good for the environment. Hitachi Energy, a global technology leader that is advancing a sustainable energy future for all, has been working with U4E to improve the efficiency of distribution transformers in developing regions like Africa.

These transformers are a key product in the power value chain, with electricity typically passing through five of them between the power plant and the consumer.

U4E research shows that a transition across the African continent to the most energy-efficient transformers could save 5.7 TWh a year, worth around US$ 400m by 2040.

This transition would also reduce CO2 emissions by 4.7 million tonnes a year. The transformers also have the added benefit of being more stable, reducing outages and increasing energy security.

“Transformers are critical for enabling an efficient and safe flow of electricity, operating continuously around the clock,” said Bruno Melles, Head of the Transformer Business at Hitachi Energy.

“Energy efficiency brings energy savings and reduces environmental impact, but also means more efficient use of existing infrastructure, which is in line with Hitachi Energy’s Sustainability 2030 strategic plan, which includes the target to achieve carbon-neutrality in our own operations.”

“In developing countries, energy efficiency also contributes to increasing the availability and access to electrical energy, contributing to key UN Sustainable Development Goals,” added Melles.

It is not just in Africa where U4E is helping to drive change. In Türkiye, U4E has been working in the industrial sector to help improve efficiency in motor-drive systems. Around 46 per cent of net electricity consumption in Türkiye comes from the industrial sector, and about 70 per cent of this comes from electric motor-drive systems, many of which are inefficient.

UNEP, through U4E, has been providing technical assistance to the Promoting Energy-Efficient Motors in Small and Medium Sized Enterprises in Türkiye (TEVMOT) project.

“The TEVMOT project was conceived to tap into this huge potential for energy savings through the transition to higher efficiency motors and to tackle the challenge of achieving these savings in an industrial sector,” said Özge Renklidağ, a Project Manager with UNDP.

“More than 90 per cent of the enterprises are small and medium-size enterprises, which have traditionally had difficulties in obtaining access to finance for energy-efficient products.”

The project, which started in 2017, and has been extended until the end of 2023, will contribute to Türkiye’s intended Nationally Determined Contribution commitment to reduce its greenhouse gas emissions by 21 per cent from the business-as-usual level by 2030.

“Through projects such as these, increased energy efficiency has been shown to offer real contributions in reducing greenhouse gas emissions,” said Blake, “U4E is working across the world to ensure that sustainable, cost-effective solutions are offered.” 

UNEP

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Greenpeace tells Big Oil to stay clear of Congo’s carbon bomb

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The world’s largest oil and gas companies are urged by Greenpeace to sit out a major oil and gas auction in the Democratic Republic of Congo (DRC) at the end of July. In letters sent to oil companies worldwide, Greenpeace warns of an ominous auction at the expense of biodiversity and global climate. The massive auction – fiercely opposed by local communities – overlaps peatlands and several Protected Areas.

Yesterday, DRC’s Oil Minister Didier Budimbu announced the auction covers 27 oil and three gas fields, exceeding the government’s decision in April, potentially without a legal mandate. The April plan encompassed an area more than 240,000 km² – an area about 300 times the size of Nairobi. The decision came only five months after the signing of a $500 million deal at the COP26 to help protect DRC’s forests with the Central African Forest Initiative (CAFI).

“This auction not only makes a mockery of DRC’s posturing as a solution country for the climate crisis – it exposes Congolese people to corruption, violence, and poverty that inevitably come with the curse of oil, as well as more heat waves and less rains for all Africans, said Irene Wabiwa, International Project Lead for the Congo forest campaign at Greenpeace Africa. 

In a field trip last week to four of the designated oil blocks, Greenpeace Africa’s forest campaigners collected testimonies from local communities that were all shocked about the prospective auction of their lands to oil companies. Some communities, such as those living around the Upemba national park, see the prospective oil exploration as a direct threat to the lake they rely on for generations and are planning to resist it.

In a letter sent to oil and gas companies in Africa, Europe and the US, Greenpeace warns of oil blocks overlapping carbon-rich peatlands. In a recent article, Prof. Simon Lewis of the University of Leeds notes four blocks overlapping peatlands that store 5.8 billion tons of carbon – that is equivalent to more than 15 percent of global energy-related CO2 emissions in 2021. According to the International Energy Agency, any new fossil fuel project today would undermine reaching net-zero emissions by 2050 and this auction would be particularly toxic. 

“The international community and the Congolese government must end the neocolonial scramble for African fossil fuels by restricting oil companies’ access to the DRC, focusing instead on ending energy poverty through supporting clean, decentralised renewable energies” added Irene Wabiwa.

Contrary to repeated claims by Minister Budimbu that none of the oil and gas blocks to be auctioned lies within Protected Areas, official maps show that nine do.  The Minister acknowledged his miscommunication on 13 June. Following the augmentation of the auction, the updated number of blocks overlapping Protected Areas may be as high as 12. 

It remains unclear which oil companies are planning to bid in the auction. In a petition launched by Greenpeace with local and international partners, almost 100,000 people call on Congolese President Felix Tschisekedi not to sacrifice the rainforest to the oil industry.

This auction is taking place in the midst of a new global scramble for African fossil fuels reserves, from West African gas, through East African oil, even to importing South African coal

Greenpeace Africa calls on governments in the continent to put the interest of their people over the greed of rich nations and their multinational corporations by accelerating investments in renewable, clean and decentralised energy. And urges  all oil and gas companies to refrain from participating in the neocolonial scramble for African fossil fuels.

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Waste incineration and ‘recycled carbon fuel’, putting stokes in the renewable energy wheel

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Today the Committee on Industry, Research and Energy (ITRE) – European Parliaments’ lead committee on the revision of the Renewable Energy Directive (RED) – called for the Member States to take measures to ensure that energy from biomass is produced in a way that minimises distortive effects on the raw material market and harmful impacts on biodiversity, the environment and the climate. To that end, Member States shall take into account the waste hierarchy and the cascading principle.

As part of the measures, it requires the Member States to terminate support for the production of energy generated from the incineration of waste if the separate collection and the waste hierarchy obligations outlined in the Waste Framework Directive have not been complied with. 

Janek Vähk, Climate, Energy and Air Pollution Programme Coordinator: “Although a step in the right direction, the proposed criteria is a weak qualifier, given that, at incineration plants, the ‘biodegradable waste’, is never combusted without fossil-derived materials present. Thus, it remains possible for ‘renewable energy’ to be generated while emitting large quantities of fossil-derived CO2. Incineration plants are already the most carbon intense source of power in some Member States”. 

Vähk added, “We call for the criteria for the use of wastes to be improved so that no support for renewable energy is offered for the combustion of mixed waste”.

The committee also has decided to keep recycled carbon fuels – i.e. potentially plastic based fuels – as part of the Renewable Energy Directive, allowing non-renewable energy sources to contribute towards the EU renewables targets.  A recent study showed that plastic-derived fuel produces higher exhaust emissions compared to diesel. 

Lauriane Veillard, Policy Officer on Chemical Recycling and Plastic-to-Fuels: “Why does the European Parliament keep recycled carbon fuels as part of Renewable Energy Directive, when the definition itself recognizes the non-renewable sources of these fuels? This is greenwashing and will strongly undermine efforts to decarbonise the transport sector. We call on co-legislators to fully exclude the use of fossil based-fuels as part of the RED.”   

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