1 The LAC power sector stands at a critical juncture, poised for significant transformation amid rapidly growing electricity demand. Projections indicate that electricity consumption could increase by 90% by 2050 under existing policies – and potentially surge by 180% under current scenarios.1 This increase reflects ongoing urbanization, economic growth and electrification efforts throughout the region, including the expansion of electricity access and the increasing electrification of transport, industrial processes and energy use in homes and businesses, particularly data centres required for artificial intelligence (AI) potentially adding further load. The region already boasts an exceptionally clean power system. With abundant renewable energy resources and the particularly strong expansion of hydropower, the region achieved a historic 69% of electricity generation from renewable sources in 2024 with hydropower contributing nearly half – well above the global average of ~30%.2 At the same time, solar photovoltaic (PV) and wind are rapidly scaling. In 2024, the generation of non-conventional renewables (mainly solar PV and wind) increased by more than 30% year-on-year, underscoring the accelerating momentum of these technologies in the region.31.1 ContextOverview Surging electricity demand will require grid expansion, modernization and system integration. Definition of power systems BOX 1 Power systems comprise generation, transmission, distribution and demand-side resources, working together to deliver reliable electricity. In the future, power systems must adapt to rising demand while continuing to ensure sustainability, security of supply and inclusive growth. Power generation and consumption in LAC in 20244TABLE 2 Indicator Value/percentage Total electricity generation 1,829 terawatt-hour (TWh) (5.5% year-on-year growth) Generation mix by source Hydropower 45%, natural gas 25%, wind 12%, solar 7%, bioenergy 4%, coal 2%, nuclear 2%, oil 2%, geothermal 1% Share of renewables in generation 69% Share of renewables in new installed capacity 79% Energy surplus 12% surplus in 2023; projected 27% surplus in 2024 Supply vs demand growth between 2023-24 Supply up 2.2%, final consumption up 3.8% Electricity access coverage 97.37%, but with 17 million people still without access Target share of renewables in generation by 205085% clean electricity generation, requiring 1,500 gigawatts (GW) of additional capacity Advancing Latin America’s Power System Transformation 5

Advancing Latin America%27s Power System Transformation 2025