The prospects for a zero GHG power sector in Latin America

Walter Vergara, July 7th , 2017

Senior fellow, WRI

Inter American Dialogue, Washington DC

Abengoa, Conceptualization of Cerro Dominador CSP plant in Chile

• 10% of global emissions (4.6 GtCO2e); 7.7 tCO2e per capita;

• 22% decrease in carbon intensity per GDP-PPP since 2000;

• 48% renewable power = 0.21 tCO2e /MWh;

• Urban public-transport share of passenger trips even higher than in

Northern Europe;

• Nearly 50% of emissions come from land use and land use change.

LAC’s carbon footprint

Projected demand and emissions of the power sector

0

5

10

15

20

25

2000 2010 2020 2030 2040 2050 2060 2070

EJ/y

ear

GEA-MIX GEA-BAU

0

500

1000

1500

2000

2500

1990 2012 2030 2050 2070

MtC

O2e

CAIT | GEA-BAU

(CAIT, 2015; IIASA, 2015)

Area: 102,000 sq km Irradiance 265 W/m2 Power received 27.4 TW or 80 PWh per year Proven oil reserves of Saudia Arabia 268 billion barrels of oil If all converted to power: 26 PWh With average efficiency of 15% In 16 years, 4% of the area of Atacama generates same power as all the proven all proven oil reserves of Saudi Arabia.

Atacama Desert Energy field

Area: 10,000 sq km Wind Field: Class Seven (Consistent over 9m/s at 50 m height) Estimated Wind Energy Potential: 18 GW (ACS, 2012) (Prieto, 2008) (Colombia’s estimated installed capacity is 15.5 GW) Installed capacity: 20 MW Projects proposed: 3 GW

Atacama desert: Energy field Guajira Peninsula Energy Field

Jepirachi power plant

(Ecofys, 2009)

Resource endowment Renewable energy sources in Latin America

0 20 40 60

PWh/year

Geothermal

OCEAN

Hydro-Power

Wind-offshore

Wind-onshore

Solar PV

Solar CSP

Biomass-Residues

• The region’s endowment estimated to be at about 93 PWh (Ecofys 2009)

• The global power

demand sits at 19.7 PWh (EIA,2015).

Hydro power plants > 1 GW nominal capacity

Source: Power Watch, 2017

Policy Framework has made progress

• Most countries: o RE targets

o RE programs & policies

• Many countries: o Fiscal incentives/provisions

• Some countries o Carbon tax

o Preferential dispatch

o Regs on distributive power

(IRENA, 2015)

Generation costs are falling (US$/kWh)

Calculated LCOEs for renewables

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

Solar PV Solar CSP Wind onshore

US$

/kW

h

2012 20252050 2075

0.000

0.050

0.100

0.150

0.200

0.250

0.300

0.350

0.400

0.450

0.500

2012 2025 2050 2075

US$

/kW

h

HydroWindSolar utility PVSolar CSP without storageSolar Tower with 7 h storageWave powerTidal powerGeothermalCoalNatural gasDiesel (1.71 US$/gallon)Diesel (5 US$/gallon)

Pathway to zero carbon power in LAC

• All new demand is met by renewables by 2020

• Fossil plants other than gas are mothballed by 2030

• All NG plants are mothballed by 2050

• Grid integrated by 2030 (regional storage in hydro)

• Widespread distributed power by 2030

80 GW

240 GW

540 GW 960 GW

Key barriers facing decarbonisation of power in the region

San Jacinto-Tecate Geothermal Plant

Fossil-fuel subsidies remain an important obstacle to entry; Lack of CO2 market/carbon tax delays transition; Grid integration and distributed power face entrenched interests; Regional market integration in power needs to be achieved.

Interconnected regional grid

• Allow large reservoirs of renewable energy to access regional market;

• Dampen the intermittencies of local renewable resources;

• Allow regional multi-annual reservoirs to operate as a large energy storage facility;

• Reduce power costs.

Modal share in urban transport

Sources: (Berlin, 2013), (Bogotá, 2013), (Curitiba, 2011), (Copenhagen, 2013), (USA, 2012) recalculated

26%

31%

30%

13%

Berlin

Public Transport

Private Transport

Walk

Cycle

44.7%

17.5%

27.5%

5.1% 3.8% 1.5%

Bogota

Public Transport

Private Transport

Walk

Taxi

Cycle

Other

28%

29%

7%

36%

Copenhagen

Public Transport

Private Transport

Walk

Cycle

45%

28%

21%

5% 1% Curitiba

Public Transport

Private Transport

Walk

Cycle

Other

5.2%

79.8%

10.1%

2.9% 1.3% 0.6% USA

Public Transport

Private Transport

Carpool

Walk

Taxi

Cycle

Synergies between low-carbon power and transport.

Technology Pace of Change Impact

Renewable energy PV costs falling at 22% per year

since 1976

Market size for PVs increased

40% per year 2000-2015

Reduced operational costs of

electric vehicles

Energy storage Falling at 14% per year since

2000

Matches supply & demand.

Increases autonomy of

vehicles.

Electric vehicles Costs to be at par with ICE by

2020

Can complete power demand

curves

Charging stations Wireless stations emerging Increased driving range

Projected learning curves for electric vehicle options with credit for avoided

cost of air pollution

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Electric Cars Electric Buses (18m) Electric Trucks

US$

/km

2012 2025 2050 2075

current LCOE for Gasoline Cars

current LCOE for Diesel Buses

current LCOE for Diesel Trucks

Energy savings from full transport electrification

0

1

2

3

4

5

6

2005 2010 2020 2030 2040 2050 2060 2070

PW

h/y

ear

Equivalent energy demand of transport sector if fossil fuels were used

Actual energy demand of electricity by transport sector

Author’s estimates. (IIASA, 2012)

Complementarity of electricity and transport demand

Typical daily load curve in Colombia. Nominal capacity for hydro is 10GW. System requires expansion to handle peak demand. Daily energy demand of diesel is 180 GWh per day, or 60 GWh electric. If 50% is now electric, this would require an additional capacity of 1250 MW per hour distributed during the period of lower demand.

Typical load curve of power demand In Colombia.

Added value of a Zero GHG Power Sector • Energy security (inexhaustible renewable resources);

• Improvements in terms of trade;

• Improved air quality in urban areas (electrification of transport);

• Regional cooperation (integrated grid and means of transport); and,

• Places the region on a path more consistent with the sustainable development goals just adopted by the UN (climate, cities, energy, forests)

• It would support the deployment of new means of production and better use of natural resources with improvements in quality of life. It would not just signal a leadership role for the region in the climate arena.

Data sources

• CAIT (emissions today, www.cait.wri.org), • IIASA (emissions under BAU projections, (www.iiasa.ac.at/web-

apps/ene/geadb/dsd) • ENERDATA (energy use in transport and energy, www.enerdata.net) • GACMO (LCOE and LCOT, www.cdmpipeline.org) • Contact: Wvergara@wri.org

• The report can be downloaded with the following links: • - English:

http://orbit.dtu.dk/files/123115955/Zero_Carbon_Latin_America_rev.pdf

• - Spanish: http://orbit.dtu.dk/files/123116630/Carbono_Cero.pdf