Advancing Latin America%27s Power System Transformation 2025

Furthermore, the evolution of exchanges in recent years has shown increased utilization of the available regional infrastructure, associated with the occurrence of adverse weather events, the complementarity of renewable energy resources and the availability of larger renewables-generated surpluses. It has been observed that countries with regional physical integration infrastructure have been able to reduce or, in some cases, avoid adverse impacts on energy supply due to climate phenomena, even though this infrastructure has shown a low utilization factor in the past in some countries.21Securing timely agreements for new electrical interconnections and increasing energy exchanges by making better use of existing infrastructure are top short-term priorities for regional integration among countries. Progress on these agreements will trigger new investments in power generation and interconnection projects that are currently in the pipeline. In addition to strengthening system resilience, regional interconnection also promotes greater economic efficiency. An IDB analysis indicates that it helps avoid investments in reserves, leverage economies of scale, optimize infrastructure use and foster more competitive markets.22LAC electricity grid and generation capacity FIGURE 1 Grids Aggregated operational electricity generation capacity Coal Gas Wind Hydro Oil Bioenergy Geothermal Nuclear Solar>400 (kv) 220-400 110-220 Source: International Energy Agency (2023) Latin America Energy Outlook Interactive Map20 Advancing Latin America’s Power System Transformation 14