Energy’s Future in Latin America
Peak oil in Latin America is less than 10 years away; energy integration, nuclear power plants, and large-scale renewable power generation are necessities to ensure sufficient energy supplies in the future; the region’s governments should play a stronger role in their respective energy sectors; and Latin America and the Caribbean are ripe for business. These are the significant findings of Bracewell & Giuliani and Business News Americas’ Energy Outlook 2008, which surveyed energy company executives from various countries throughout Latin America.
Among the survey’s key findings:
– 78% of respondents indicated that the regulatory and legislative outlook has improved in the past five years, with Colombia and Peru making the most advances.— Only 6% of participants think that hydroelectric and thermoelectric generation sources alone will be sufficient to meet power demand over the next 20 years. The fact that 40% think that renewable power should constitute over 10% of total power generation stands at odds with the more modest government targets set in the few countries to have even declared renewable generation goals.— In terms of how to generate significant levels of renewable power generation, almost half of all participants called for positive market intervention, 27% for greater public sector appreciation of the issues involved, and 19% of responses indicated that a key factor would be increasing the number of equipment and know-how suppliers from within the region.
– Participants flatly rejected entirely market or entirely state-based solutions, with only 8% combined support for those models.
– 45% of respondents think consumers are ill-informed and perhaps misconceive their energy supplies as a right rather than a service. Twice as many responses indicated there is a lot of room for regulators to become more professional, deregulate, and provide greater information to the final client.
– 47% of responses saw energy integration – cross-border infrastructure being operated on a regular and coordinated basis – as absolutely necessary for future sector operations and the most efficient use of resources.— 37% of respondents said that the dominance of state-owned companies is detrimental to the region’s energy sector.
— 75% of respondents agreed that in 2008, Latin America and the Caribbean are great places to do energy sector business.
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