Energy’s Future in Latin America

by Dave

MarketWatch

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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