Advancing Latin America’s Power System Transformation

The report argues that while Latin America and the Caribbean generate nearly 70% of their electricity from clean sources, the region faces significant grid bottlenecks, high system losses, and investment gaps. It proposes a transition toward a grid-centric approach involving long-term planning, innovative finance like grid-dedicated funds, and advanced technologies such as HVDC and energy storage. Furthermore, it emphasizes shifting from bilateral electricity trade to multilateral regional markets through initiatives like SIEPAC, SINEA, and SIESUR to improve resilience and efficiency.

• Latin America and the Caribbean (LAC) has a highly clean power system, with 69% of electricity generation coming from renewable sources in 2024, though this creates vulnerability to climate-related disruptions like droughts due to a heavy reliance on hydropower.
• Electricity demand in the region is projected to grow significantly, potentially increasing by 180% under current scenarios by 2050, driven by urbanization, electrification of transport and industry, and the energy needs of AI data centres.
• The region suffers from severe grid inefficiencies, with total electricity losses averaging 16-17%, nearly triple the OECD benchmark of 6%, and 53,000 GWh of renewable generation lost to curtailment in 2024 alone.
• There is a substantial investment gap for clean energy; annual investment must rise to $150 billion by 2030, with grid infrastructure specifically requiring approximately $30 billion per year until 2035, two-thirds of which is expected from private capital.
• Technological solutions to improve grid stability and capacity include the adoption of high-voltage direct current (HVDC) for long-distance transmission, digitalization for real-time monitoring, and the scaling of inverter-based resources and energy storage.
• Regional electricity trade in LAC is currently limited and primarily bilateral, accounting for less than 5% of total regional generation, necessitating a shift toward multilateral market integration to optimize resources.
• Several Regional Interconnection Systems (RIS) are advancing integration: SIEPAC in Central America, SINEA in the Andean region (including the Ecuador-Peru interconnection), and SIESUR in the Southern Cone.

APA

World Economic Forum (2025). Advancing Latin America’s Power System Transformation. https://reports.weforum.org/docs/WEF_Advancing_Latin_America's_Power_System_Transformation_2025.pdf

Chicago

World Economic Forum. Advancing Latin America’s Power System Transformation. 2025. https://reports.weforum.org/docs/WEF_Advancing_Latin_America's_Power_System_Transformation_2025.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Advancing Latin America’s Power System Transformation |date=October 2025 |url=https://reports.weforum.org/docs/WEF_Advancing_Latin_America's_Power_System_Transformation_2025.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2025advancing, author = {{World Economic Forum}}, title = {{Advancing Latin America’s Power System Transformation}}, institution = {World Economic Forum}, year = {2025}, month = oct, url = {https://reports.weforum.org/docs/WEF_Advancing_Latin_America's_Power_System_Transformation_2025.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }