The Association of Latin American Electrical Energy Distributors (ADELAT) launched the policy paper “No investment, no transition: the future of power distribution in Latin America”, which analyzes the investment needs in Argentina, Brazil, Chile, Colombia, Ecuador, Guatemala and Peru to advance an effective energy transformation.

This study identifies eleven vectors that are fundamental for the energy transition such as Electrification of New Uses, Electromobility, Connection to Distributed Generation, Digitalization and Automation, AMI (Advanced Metering Infrastructure), Service Quality, Resilience, Network Upgrade, Batteries , Loss Normalization and Universalization. These trends represent an opportunity to meet climate commitments and improve the life quality in the analyzed countries.

The analysis was commissioned to the consulting firm Grupo Mercados Energéticos, with data provided by the associated distribution companies, a detailed characterization of the current situation in each country and energy demand projections. In this way, two possible transition scenarios were established for the year 2040: one of Effective Energy Transition (compatible with the objectives established in “Connecting the Dots”, a study developed by Deloitte for Eurelectric), and another of Partial Energy Transition.

The results reveal that the first case requires an investment of US$ 289 billion additional to what would occur if the recent trend continued (US$ 143 billion), making a total of US$ 431 billion for the distributors of the 7 analyzed countries, in a time window of 17 years. For the second case, the additional investments are US$ 174 billion which, added to the US$ 133 billion of a trend, make a total of US$ 307 billion.

The paper also highlights the operational, economic, social and environmental benefits of these investments, including reductions in operating costs, which will be quantified in a second stage of the work, and the improvement of the energy services quality in the region.

In this context, ADELAT made an online presentation of the main findings, in which prominent professionals from the sector participated. The Head of the Electrical Department of the National Energy Commission of Chile, Danilo Zurita, stated: “We must modify our distribution regulatory framework to provide certainty and benefits to all those involved, recognizing the local realities of each company and incorporating new technologies”.

The director of ARIAE Electricity Working Group and Superintendent of Regulation of Distribution Services of ANEEL (Brazil), Carlos Alberto Calixto Mattar, agreed that the current model requires a review. “There is no possibility of having an energy transition if there is no investment in transmission and distribution networks,” he concluded.

The advisor of the Executive Secretary at OLADE, Medardo Cadena, said that achieving the goal of zero emissions by 2050 requires increasing the participation of electricity in the energy matrix. He specified that one of the great challenges is to guarantee that the impact of this transition is minimal for the end user, so that “the end user really feels a positive effect on the total energy bill of this entire process that we are experiencing.”

The Energy Specialist of the Inter-American Development Bank (IDB), Augusto Bonzi, added: “Whenever we think about investments and infrastructure, we must also consider employment and gender equality, to ensure that the energy transition is also sustainable”.

This meeting was part of the “ADELAT Expert Voice” Cycle which, like other initiatives of the association, seeks to promote the construction of a common language that allows regulators, distribution companies, governments and civil society to understand and effectively communicate  the essential aspects of distribution activity in the context of the energy transition.

Download the full study or its summary in your preferred language:

Spanish: https://bit.ly/Paper_Inversiones / https://bit.ly/Resumen_Inversiones

Portuguese: https://bit.ly/Paper_Investimentos / https://bit.ly/Resumo_Investimentos

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About ADELAT

The Association of Latin American Electrical Energy Distributors is a non-profit organization, created at the end of 2021. It aims to be a reference in electrical distribution activity with the objective of promoting and accompanying the transformation process of Latin American electrical distribution in the framework of the energy transition.