Sparking Ideas for a New Energy Future at the Clean Energy Ministerial
Episode 1: Latin America Leads the Clean Energy Transition: WRI Previews the Clean Energy Ministerial
The Clean Energy Ministerial (CEM) is the annual COP of energy where and clean energy solutions can hammer out what the future global energy system could and should look like. It’s a perfect chance ahead of COP29 to gather, deliberate and plan for a decarbonized planet.
WRI experts will be on the ground in Brazil all week (September 30 – October 4) sharing their expertise and collaborating with renewable energy industry leaders to advance clean energy in Latin America, a region that’s surprisingly less dependent on fossil fuels than most.
In addition to providing an opportunity to forge stronger partnerships, CEM demonstrates how WRI is well-positioned to help ensure a just and equitable future for people, nature and climate. Alex Dolan, Communications and Engagement Lead for WRI’s Global Energy Program, explores the role that South America countries will play at the conference and beyond.
Episode Guests:
- Javier Bustos-Salvano, Executive Director for ACENOR
- Tatsatom Goncalves, Research Fellow, WRI Energy
Or listen on:
- Episode 1 Transcript
Alex Dolan, WRI Communications and Engagement Lead (00:05 – 1:10)
Hi, this is Alex Dolan with the World Resources Institute, and you are listening to the World Resources Institute's Big Ideas into Action podcast. We are going to be talking about the Clean Energy Ministerial and the global energy transition today.
This is the first of a two-part series on this year's Clean Energy Ministerial or otherwise known as CEM. For those who don't know, CEM is one of the major global convenings on the energy transition that happens in a new city every year. This year, it will be in Brazil for the first time.
And we are joined with two guests that are going to be talking about the context of Latin America as the setting for this year's CEM, why Latin America is relevant to the global energy transition, what different countries can expect to see, and what we can expect to see in terms of announcements and developments at this year's CEM, and how it relates to other major convenings like COP throughout the year.
With me, I am joined by two guests. We have Javier Bustos-Salvano, the executive director for Acenor, Javier, and thank you for joining us.
Javier Bustos, ACENOR Executive Director (1:11 – 1:12)
Thank you, nice to meet you.
Alex Dolan, WRI Communications and Engagement Lead (1:13 – 1:23)
Nice to meet you. And we also have Tatsatom Goncalves, the research fellow for the energy program here at WRI. Tatsatom, thank you for joining us.
Tatsatom Goncalves, WRI Energy Research Fellow (1:23 – 1:24)
Thank you, Alex. Happy to be here.
Alex Dolan, WRI Communications and Engagement Lead (1:25 – 1:32)
Great. So to get started, Javier, can you tell us a little bit about yourself and your work in the energy transition?
Javier Bustos, ACENOR Executive Director (1:33 – 2:13)
I am the executive director of ACENOR. That's true in Chile. That's the association that represents the demand side, the largest consumers of electricity in Chile. Just to have an idea, these are firms that work on the mining and industry sector services, the transportation, and represents approximately 60% of the electricity demand in Chile.
But I have a long history in the sector, 20 years working in the electricity and the energy sector in Chile. And I used to work also for the Energy Ministry and I had the opportunity to work also with CEM, in the past, so it's a pleasure to be here.
Alex Dolan, WRI Communications and Engagement Lead (2:14 – 2:23)
So you have attended other CEMs in the past. The CEM has also been in Latin America three times. What makes it different this year that it's in Brazil?
Javier Bustos, ACENOR Executive Director (2:24 – 3:10)
Well, it is interesting that the two countries that are advancing more, perhaps in terms of renewables and energy transition, according to international sources, is Chile and Brazil. Brazil, of course, is the largest country, not only in terms of their geography, but also in terms of the demand of electricity and the capacity of transitioning to renewables.
And in the case of Chile, we also look to Brazil for their experience. There are many market design and regulatory designs that we learned from the experience in Brazil. So for us, it's interesting always to look at what the ah big country in the south continent is doing in terms of energy.
Alex Dolan, WRI Communications and Engagement Lead (3:11 – 3:18)
Tatsatom. Can you talk a little bit about the history of the Clean Energy Ministerial and how it matters to the global energy transition?
Tatsatom Goncalves, WRI Energy Research Fellow (3:19 – 5:15)
Absolutely. So the Clean Energy Ministerial, or CEM for short, is an intergovernmental ministerial meeting that is hosted by a different country every year. The Clean Energy Ministerial was founded by the United States back in 2010, in the early years of the Obama administration, and it was initially housed by the US Department of Energy, transitioning then to the International Energy Agency, or IEA, in the mid-2010s.
And it's really an opportunity for energy ministers from around the world to share progress towards the clean energy transition, learn from each other and identify points of potential collaboration between them. Certainly very important given the global economy that we live in, where supply chains relevant to the energy sector touch on several geographies often across continents.
I will also add that a lot of the heavyweights in the global economy are represented at CEM, so the United States, China, Japan, Germany, the UK, Brazil, those are all part of this ministerial meeting and all together they represent about 90% of installed renewable energy generation and capacity and 80% of global renewable energy investments -- and the majority of public research and development investment.
The mission of CEM, is very straightforward, is to accelerate the energy transition and it does so by facilitating dialogue across governments to expand the scale, and the reach in terms of sectors, as well as societal awareness of the energy transition.
The last point I'll add is that CEM in terms of operation outside of this...this annual meeting also has a series of work streams that countries can opt to participate in, and those touch on power, transport, industry, buildings, and a couple of others as well.
Alex Dolan, WRI Communications and Engagement Lead (5:16 – 5:29)
Okay, great. And I'll turn this over to Javier. From somebody who's been to several past CEMS, who typically will come to these convenings and and historically, what's come out of them that's been significant?
Javier Bustos, ACENOR Executive Director (5:30 – 6:14)
It's a good place to discuss about the trends, the opportunities, the emerging technologies that we’re looking at for the energy transition. And particularly it is relevant because it is a place where the governments and the agencies of the different countries participate, also international organizations and that provide information, support, to the implementation of these energy policies. And also part of the private sector that participates also in the investment in generation, transmission, infrastructure in general, and new technologies in general that are supporting this energy transition.
Alex Dolan, WRI Communications and Engagement Lead (6:15 – 6:22)
How does this impact other major convenings that will happen this fall? How does this relate to COP and other convenings?
Javier Bustos, ACENOR Executive Director (6:23 – 7:17)
It's all part of the same global action in terms of reaching the goals that we have in terms of decarbonization, in terms of a future of net zero emissions. That's part of, for example, my country Chile has in the long term are a goal of becoming a net zero country. Also, it is important because all these meetings and opportunities in some way contribute to the final goal and the discussions that happens in COP and in other instance, for example, meetings of the International Agency of Energy and different opportunities that appear not only in the west side of the world, but also in other parts regarding this global effort.
Alex Dolan, WRI Communications and Engagement Lead (7:18 – 7:31)
That makes sense. And I want to touch upon that finance issue since COP 29 is set to be the finance COP . But do you expect a lot of discussions focused around appropriate financing for the energy transition?
Javier Bustos, ACENOR Executive Director (7:32 – 8:55)
That's a really good point because, for example, in terms of the demand side, when we look at what the industry, the consumers, the large consumers of electricity are looking, they're looking for supply of renewable energy, particularly electricity, but also looking for other sources of renewable energy; that could be green fuels like hydrogen or other sources that could decarbonize the uses of energy.
To finance this infrastructure, all the new capacity of generation, all the new transmissions that is important to have the distribution networks that are also very relevant for the demand side. And well, how are we going to finance on that? The majority of this has to come from private investment.
So the different ways of accessing to capital in terms of, for example, long-term contracts, in terms of PPAs [Power Purchase Agreements], in terms of certificates [Renewable Energy Certificates], for example, in terms of a different kind of asset that can move large amount of capital, sometimes from countries that are wealthy countries to more developing countries.
Alex Dolan, WRI Communications and Engagement Lead (8:56 – 9:08)
And you mentioned the private sector investment and I wanted to circle back on that. What role do you feel like the private sector has in this year's CEM? What would they want to get out of it? And who are the major players that we should look at?
Javier Bustos, ACENOR Executive Director (9:09 – 10:43)
We are looking at a lot of demand for renewables, for example, from data centers. We are looking at a lot of demand of electricity or renewable electricity in sectors like, for example, to produce steel, to produce cement, into the mining sectors. So it's going to be interesting to look at all this demand side that has to, in some way, replace the whole the old contracts they used to have, the old supply they used to have, in terms of any fossil fuels, and replace for PPAs or contracts that are based on renewables.
So something that we have learned in Chile and Brazil has also a long history in this is that long-term contracts for renewables are very important to develop the new infrastructure that is going to be needed.
And it's something that, for example, in Europe is discussed right now. Europe is not an electricity system that’s based typically on long-term contracts. But here in Latin America, we have more experience on that because we need to develop a lot of infrastructure and we have higher rates of growth in terms of the energy. So long-term contracts, PPA, how these agreements and the regulation that we need and for that in a competitive market has to be developed to attract the finance, to attract the investments that are going to be needed to develop this transition.
Alex Dolan, WRI Communications and Engagement Lead (10:44 – 11:07)
I want to take a step back and talk a little bit more about the region and where it is in the energy transition. Now, Latin America has many things going for it -- it has much of its energy already being provided by renewables. Can you speak a little bit more about where the region is in the energy transition now, and then how that relates to what's going to happen at this year's CEM?
Javier Bustos, ACENOR Executive Director (11:08 – 14:01)
Well, the region is typically more renewable than the rest of the world because we rely a lot of the time to have hydro power. That's the case in Brazil, the case in Paraguay, for example. Also in Chile, we used to have a lot, a large portion of our electricity based on hyrdropower. Colombia is still one of the largest players in hydropower, too. But with the technological change that happened in the last 10-15 years, we have seen that wind power, solar power has become the sources of new energy that are cost-effective and cost-efficient. In the terms of Brazil, we have seen a lot of wind power, windmills in the country.
In the case of Chile, Peru and also Argentina. We have seen a lot of solar panels installed in the region. In the case of Chile, the largest growth we have seen in solar power at utility-scale and also at the distributed or not distributed but small scale also. Nowadays, we have that non-conventional renewables in Chile represent almost 40% of the electricity that is produced in the country. And the other neighboring countries have the same potential to rely a lot on these non-conventional renewables.
But this transition has to be done carefully in terms of a security of supply, but also in terms of the cost of the transition, because none of the countries also want to raise their tariffs, and that happens also in all the economies and all the systems that depend a lot on the price of electricity to develop their and economies and to also consume in households on and services.
Right now, the cheapest way to expand renewables come from solar power, from wind, and that's something that is growing in all the countries, perhaps at different speeds. Some countries go faster than others, but that depends also on the access to capital, on the on conditions there were regulatory conditions of the country, how stable is the country to attract investment?
We have learned, for example, in the case of Chile, a lot in the last five years, because we have a lot of investment in renewals and that put pressure on the system, on the transmission system, on the operation system, so there is a lot to share between the countries of how we can do this in the best way.
Alex Dolan, WRI Communications and Engagement Lead (14:02 – 14:14)
Let's go take a deeper dive into Chile then. You know, what from your perspective has gone right and has gone wrong? And what are the lessons that Chile can learn from and build on?
Javier Bustos, ACENOR Executive Director (14:15 – 16:30)
In Chile, we have been very successful to attract investment in renewable capacity, particularly solar wind. We have been less successful in, for example, how we can implement all this energy transition and have a benefit and on the final price of the consumer. So the prices of the consumers, in some moments were rising and the government took the decision to freeze tariffs for a couple of years – that also impacted the profitability of some of the companies. In the country, we already have one solar plant that went into bankruptcy because of these conditions. So sometimes it's very fast how this expansion on solar and wind happens. And it's important that they are located in the best possible place for the electricity system.
What happens in the case of Chile, that the majority of these plants were installed in the north part of the country, where there is an excess of supply, and that drives marginal cost of electricity in the north on to zero, what happens also sometimes in Europe with negative prices, and also reduce the profitability of these companies while all the transmission lines drives this electricity to the center or south part of the country where the major demand is.
So there are things to learn about how to a manage the proper way of this transition that happens really fast, where the companies are closing, for example, their coal plants faster than we thought at the beginning of the decarbonization process, because they become less and less profitable when the renewables became very competitive. So it is important to learn, yes, you can attract a lot of investment, but you have to also manage well, the impacts on the systems in terms of prices, cost, and also how they first try to be managed in the proper way.
Alex Dolan, WRI Communications and Engagement Lead (16:31 – 16:53)
And you mentioned that you know there are variances in the region and there's some countries that are are further advancing into the clean energy transition than others. From your perspective, who's a good example of a country that's really moving accelerating into the clean energy transition? Who could be a model for others to follow?
Javier Bustos, ACENOR Executive Director (16:54 – 18:47)
In the terms of Chile that has a very particular geography. It's a very thin and long country; it's very different than what happens, for example, in Brazil and or countries like Colombia. But there are good things to learn about each other. We learn from Brazil how these long-term contracts are a useful tool to develop new infrastructure and renewables. We learn from Spain, for example, about their development in terms of solar power. We learn from England or the UK how the regulation has to be implemented to have a cost-effective or cost-efficient system.
We are looking also at what Australia, for example, is doing because in terms of Chile, we are similar in economic sectors, for example, mining. But also we look at New Zealand, what it's doing in terms of renewals, because they have a geography that is similar in terms of how long the country is or what California also is doing in terms of renewables, demand-side and storage.
For example, one thing that we're looking at a lot is what happened with the storage in Australia and California. And right now we have, for example, in the last five years, a huge amount of investment on renewables. Now we are having a lot of investment in storage. And this has happened really fast. We are hoping to have in two or three more years, two or almost three gigawatts of storage in long-term batteries of three or four hours of storage. And that's why I changed the how the market works really fast.
Alex Dolan, WRI Communications and Engagement Lead (18:47 – 19:05)
Thank you. um I'm going to switch this over to Tatsatom and wanted to get a sense from, from your point of view, as somebody who's representing the World Resources Institute, what is WRI looking to do at CEM this year and how has the organization participated in past CEMs ?
Tatsatom Goncalves, WRI Energy Research Fellow (19:06 – 22:18)
Thanks, Alex. So WRI, we're no strangers to CEM. We have been regular participants, especially in recent years. We see CEM to be a pivotal moment in the annual road to COP, which often happens a few months after CEM, because conversations that take place during CEM often can carry on to COP or may lead to announcements about collaborations during COP. CEM is a way for WRI to stay abreast of the climate and energy narrative and help shape that narrative to reflect greater ambition and inform it based on the best available science.
This year, WRI will be on the ground all week and will be sharing our expertise through panels on clean energy investment, grid resilience, urban transportation, as well as roundtables with the public and private sector and several other topics.
Our WRI delegation, if you might call it so, we'll be meeting with several local and regional representatives from the renewable energy industry, with financial institutions as well as corporate buyers. Certainly value collaboration and partnership, in Latin America specifically. We recognize this as a region that has kind of flown under the radar in recent years and especially given, you know several other developments around the world in Asia with a constant...with the already large economies and population both at increasingly large numbers. There have been a lot of policy developments in the United States and in Europe with for incentives and regulations on clean energy.
I think this will be a year, the next 12 months will be a chance for Latin America to claim its space again in the global stage through not only the Clean Energy Ministerial, but also G20 summits later this year and COP30, which will be taking place at the end of 2025 in the city of Belém, which is the gateway city to the Amazon.
So I think WRI would like to leverage that this global attention in Latin America to create a coalition within Latin America that would help advance the policy enhancements that are needed to advance clean energy. But also, as Javier mentioned, facilitate this exchange of lessons that are learned in several different countries and make sure that they are, you know, there's cross-pollination across the region.
And I will say there's also and not only lessons to be learned across the region, but also from others, other countries. So in Asia, for example, we, WRI is one of the co-hosts for the Asia Clean Energy Coalition, or ACEC, and there are certainly lots of lessons that we have drawn from that initiative that could be valuable for Latin American context.
Alex Dolan, WRI Communications and Engagement Lead (22:19 – 22:35)
I'd like to loop back to Javier. You talked a little bit about some of the opportunities for policy makers and regulatory entities. Where do you feel like were the regulators fit into this year's CEM?
Javier Bustos, ACENOR Executive Director (22:36 – 24:58)
Well, one of the major things that is evolving is how we want to develop the flexibility in the electricity systems, for example, to incorporate all these renewables that are variable in essence. So what happens is that when we look at countries that have more than 30% for example of variable renewables in their electricity mix, we see a lot of challenges that that we haven't seen before. And what happens there is, OK, perhaps we can manage this with the storage. Well, how are we going to finance that investment in storage? What is the business model of storage? This is not a regular business model like generation, for example. So this is a challenge of how we're going to create flexible markets for the renewables that we are going to be incorporating in the electricity mix.
How are we going to pay for this infrastructure? How are we going to give the incentives to make the infrastructure that we're going to need in a way that this technology can be adapt, sorry, adopted at the right time and the right place? Where are the locational signals, for example? Not all the countries have locational prices for example and right now we are looking at not only large-scale utilities that are producing renewables, but competitive small units that are closer to the consumer places. So how [to move] this distribution of generation closer to the demand is going to be another challenge.
I think for many of our countries, we still rely on the old paradigm of the electricity sectors, where you have big generation, you have long transmission lines, and there was a passive role for the demand. And now we are having storage, we are having a distributed generation all around, and we are having a demand that is becoming more active and also more responsive to what is happening in the electricity sector.
Alex Dolan, WRI Communications and Engagement Lead (24:59 – 25:10)
One of the topics that is expected to come up this year is industrial carbonization. How do you expect that to come up at CEM and what are the opportunities?
Tatsatom Goncalves, WRI Energy Research Fellow (25:11 - 27:07)
I'll start that question by mentioning that a good portion of my work is focused on actually not in Latin America, but in Asia and particularly Southeast Asia. And a lot of those countries are home to large portions of global supply chains, um many of which rely on industrial processes that require heat, sometimes very high temperatures to manufacture the products they're providing for the rest of the world. So a lot of those countries, and those include China, India, Indonesia, Vietnam as well, those countries are in their journey to decarbonize and are very interested in solutions that will address that heat requirement.
I think for this CEM, we can expect Brazil to be aware of that, that need not only from among the Asian countries, but also other parts of the world. And I think we can expect Brazil to promote technologies and energy sources of economic interest to the country. I think primarily that includes hydrogen, but also biofuels, both of which entail various caveats, right. For hydrogen, it's a technology that is growing but still has limited commercial viability. For biofuels, there are multiple considerations around ecosystem impact and land use implications that need to be taken into account.
But I think regardless of these, how Brazil chooses to make these pitches to the world and how they are received by other countries should give us an early indication of what that conversation will look like and will evolve over the coming years in major other forms that gather a lot more attention than this wonky energy summit right, like the G20 and COP.
Alex Dolan, WRI Communications and Engagement Lead (27:08 – 27:28)
I remember over the last week or so, Al Gore said something to the effect of, you know the commitments at COP were similar to New Year's resolutions where they're easy to make and hard to keep, or I'm paraphrasing. Do you feel like the commitments made at CEM, the real challenge we'll be seeing if they actually manifest?
Tatsatom Goncalves, WRI Energy Research Fellow (27:29 – 28:13)
So this will be the first clean energy ministerial to happen since the Triple Up and Double Down campaign, which actually calls for a tripling of renewables and doubling of energy efficiency rates on a global scale, which is language that made its way to the COP agreement last year. So I think that narrative will still be top of mind for people and it will still be...a lot of the sessions during CEM will be focused on how we actually drive this into implementation, how do we actually deliver on that pledge?
We shall see on the on the outgoing episode of this series know how much of that came about.
Alex Dolan, WRI Communications and Engagement Lead (28:14 – 28:23)
Well, and to that, as we as we start to wind down, what what are the things that you feel like we should watch out for at this year's CEM? And I guess I'll ask Tatsitama first.
Tatsatom Goncalves, WRI Energy Research Fellow (28:24 – 29:35)
Yeah so, I think, you know as a Brazilian myself, I'm very curious to see how Brazil will project its image on the global stage. And I have a few guesses about that. So we mentioned earlier that Latin America has a grid that's cleaner than most of the rest of the world, and you know if you look at Brazil, you have less than 20% of the power mix coming from fossil fuels. That's largely thanks to hydropower in the 20th century, but also solar and wind during the present century.
That statistic is somewhat mirrored in several other countries in the region and so I think we can expect Brazil to bring attention to this and presents itself as an example with lessons for other countries to follow. I also think that, as I mentioned earlier, we can expect Brazil to promote specific technologies that are emerging in the global debate, which include hydrogen, or green hydrogen specifically, and biofuels, both of which you know have several considerations to take into account, but I think will be a recurring topic during this Clean Energy Ministerial.
Alex Dolan, WRI Communications and Engagement Lead (29:36 - 29:41)
And Javier, same question to you. What should we expect to see come out of this year? Or what are you what are you watching for?
Javier Bustos, ACENOR Executive Director (29:42 – 31:02)
Well, I'm looking very interested in what's going to be the discussion and the topics about supplements that we need for the energy transition in terms of infrastructure of storage. We have seen that the cost of renewals went down very fast very soon. We are seeing the same pattern with batteries. That could be a major change on the energy transition. It's going to be very interesting to know how the countries are managing this, how the international organizations and the private investors are looking to it.
Also, it's very important of how the discussion on long-term finance of these investments on how we manage to do all this transition in the most cost-efficient way, particularly for countries in Latin America that usually have restrictions of capital, budgets that sometimes cannot afford a large investment and they need to attract private investment.
That's going to be the two parts that I think are going to be interesting to look at in the CEM.
Alex Dolan, WRI Communications and Engagement Lead (31:03 – 32:07)
I'd like to thank both of my guests for joining today. That includes Javier Busto-Salvano and Tazatome Gonzalez from WRI. Again, we were talking about the Clean Energy Ministerial. This is the first of a two-part series on this year's CEM. We will reconvene after CEM wraps for a wrap-up on what happened at this year's Clean Energy Ministerial and how that plays into other convenings, especially COP 29 happening at the end of the year.
For more information on the WRI Energy Program, you can go to wri.org/energy. For more information on our podcasts, you can go to wri.org/podcasts.
This episode was produced and edited by Daniel Baker. For my colleagues at WRI, my name is Alex Dolan. Don't forget to leave us a five-star rating on whatever podcast streaming platform you listen this on. Every review counts, and thank you for listening.
Episode 2: Preparing the World for Proactive Energy Planning: WRI Recaps the Clean Energy Ministerial
Paving the way to COP29 next month and COP30 in 2025, Brazil hosted an impactful Clean Energy Ministerial (CEM) at the beginning of October. WRI experts met with global leaders all week, laying a foundation for Latin American countries to demand enabling regulatory frameworks for renewable energy deployment and financing — two topics that regional expert peers also highlighted during our discussion. It’s critical to enact policies in emerging markets that allow private and public finance to flow into and upgrade energy systems.
Episode Guests:
- Sylvana Bohrt, International Clean Energy Associate, WRI Energy Program
- Ana Teixeira, Country Transition Analyst, Bloomberg NEF
- Juan Paredes, Senior Renewable Energy Specialist, Inter-American Development Bank (IADB)
Or listen on:
- Episode 2 Transcript
Alex Dolan (Host, WRI) 0:05 – 2:03
Welcome to the WRI Big Ideas into Action podcast. This is the second of two episodes that we have dedicated to this year's Clean Energy Ministerial. The Clean Energy Ministerial, or CEM, is a dedicated global event that is meant to further discussions about the clean energy transition. This year, for the first time, it was hosted in Brazil.
And in this episode, we are joined by three guests, the first of which is Ana Teixeira, the Country Transition Analyst for Bloomberg NEF. We have Juan Paredes, Senior Renewable Energy Specialist at the Inter-American Development Bank (IADB), and my colleague here at WRI, Sylvana Bohrt, the Clean Energy Associate for International at our energy program.
So this year's Clean Energy Ministerial was a big one. It welcomed over 1,000 delegates in more than 50 sessions. It had a number of outcomes, including a Call-to-Action for power system solutions. We have an action plan that was generated to facilitate future fuels and a gigaton by 2030 campaign related to carbon management solutions. Our guests will be talking about the outcomes, how that relates to the energy transition in Latin America, and how it will relate to other major convenings this year, especially COP29 happening next month in Azerbaijan.
And with that, we will go into the discussion.
Welcome, everybody, and thank you for making the time to join us on this podcast episode. And I'd like to start this out with a question to Ana. Ana, what's your reaction to major announcements that came out of this year's Clean Energy Ministerial? And if we could look further back, how do they play into the larger historical context of what CEM has done every year?
Ana Teixeira (Country Transition Analyst, BloombergNEF) 2:04 – 4:21
Thank you, Alex. I think the first approach would be to start determining what is the CEM universe. So, CEM accounts for 28 individual nations plus the European Commission, which is basically all of the G20, with the exception of Chile, New Zealand, Norway and UAE. And of course, the African Union.
So this is the biggest world's economies concentrated in a forum to discuss the energy transition. And this year marks the 15 years of CEM. If we look at the progress in these last 15 years, as highlighted by the energy transition facet-book of 2024, which was actually launched by BNF during CEM, we can observe that some members now have pledges that cover 76% of global emissions, so most major emissions. And these nations have jumped from spending just under $150 billion dollars a year back in 2009 to over 10 times more in 2023. So yearly expenditure in energy transition investment went up to $1.6 trillion in 2023.
In the last 15 years, this represented $8.3 trillion of investment in the energy transition, which was mostly focused on energy transition, ah renewable energy, transport, and power grids, which signaled that on average some members committed 1.2% of their GDP in energy transition investments, so a huge amount.
And this investment also is reflected on the drastic change in capacity additions of these markets. By 2009, renewables were just under 46% of the net-capacity additions. And by 2023, this is now up to 95%. In other sectors, Clean Energy Ministerial members also progressed with EVs accounting for 19.4% of sales in CEM members in 2023 and over 39% of new storage output was commissioned in CEM members in just a year, back in 2023. So CEM members have still a lot to collaborate on, a lot to discuss.
Alex Dolan (Host, WRI) 4:21 – 4:29
So Ana, I actually wanted to ask you, you have the benefit of having attended this year's CEM in person. What were your takeaways from being there in person?
Ana Teixeira (Country Transition Analyst, BloombergNEF) 4:30 – 5:17
By Brazil hosting CEM this year, it really set the tone for what next year's COP will be. I think both of those things are connected. CEM always comes before COP, and I think we could see how much of Brazil's agenda for next year will have a big role to play in next year's COP during this CEM. So discussions on biofuels, for instance, hydrogen all came through, and there is also a lot of points that we will mention in the rest of the discussion, I think, on energy planning, electricity access. But I think this some really puts Brazil to play a big role on how emerging markets will lead the energy transition in the next few years.
Alex Dolan (Host, WRI) 5:18 – 5:30
Broadening out to our perspective on the region, where do you think Latin America stands regarding financing readiness and investment in the energy transition? And what can others learn from the region?
Ana Teixeira (Country Transition Analyst, BloombergNEF) 5:31 – 9:36
I think the first thing to say is that LATAM is not a homogenous region. So there's a lot of discrepancies if we look at Brazil, Chile, and Mexico, which is actually where most investment is concentrated. And then we look at the other markets.
So first of all, LATAM is, of course, favored with hydro and basically the cleanest electricity mix in the world with 64% of its total installed capacity coming from renewable sources in 2023. The region has been progressing extensively in other renewables. So if you look at solar, nine years ago, solar accounted for 1% of LATAM's generation, and now it's up to 6%. While for wind, the figure ranges from 3% to 9% in 2023.
But I think the role the region has to play is, especially if we look towards policies, because LATAM, in numbers, if we look comparatively with other regions, it's a bit smaller. If we compare with, for instance, Asia, the numbers are drastically different.
But if we look at policy, I think there's three main points for discussion. The first one is regarding transparency and clarity of process, which is of course key to attracting investors. LATAM does a great job in sharing data availability and clear formats of engagement, which is basically the first step for openness and attractiveness of investment.
The second one is long-term planning. And if you look at the developmental policies, you know that energy transition doesn't happen from one year to another. It takes a whole lot more than that. And for instance, if we give one example from the region, look at Brazil's auctions scheme. It will soon be 20 years since the country has started to do renewable energy auctions. And these longstanding policies and the knowledge built upon all those years are key to unlocking renewable energy potential in every single market and this is reflected for instance in the progress the region has made in several technologies.
And I think the other key term is the risk investments and how the region has done it. So we have quite a few examples on how investments were de-risked in Latin America and how the private sector was allowed to play a bigger part.
First things is that according to our data, all markets in Latin America are open for private sector participation in generation. While transmission retail might still be mainly stay controlled, generation is open for private players in all markets.
This, of course, is connected to the first point on transparency with clear permitting procedures, grid connections, and PPA standards playing also a big role. Giving examples on also the risking, when we talk about Brazil, we could highlight that the cost of that for energy projects in Brazil is lower than in most other emerging markets, with BNDS, the National Development Bank, having facilitated this through concessional finance and assuming higher lending risks. So, national development banks have a big role to play into making sure that energy projects are viable and attractive.
If we look at Chile, you can exemplify a market where big a big part of private sector participation played a big role. And if you look at Argentina, you can understand how multilateral development banks, or MDBs, were key enablers by providing guarantees in the country and derisking investments. So in the case of Argentina, 50 folder fund backed by the World Bank, as well as the Renovar mechanism were key to allowing the progress of renewable energy in the country.
Alex Dolan (Host, WRI) 9:36 – 9:46
I'd like to turn to Juan. What policies do you feel like are playing a major role in the region on the energy transition, especially in clean energy investment and deployment?
Juan Paredes (Senior Renewable Energy Specialist, IADB) 9:47 – 13:20
Thank you, Alex. I think Ana has already made a very good summary on the key aspects that are needed in order to enhance the energy transition. I would highlight maybe the long-term aspects that policy certainty is needed, especially for the private sector to come in and deploy the technology, deploy their capital.
But long-term targets are really key, that long-term vision. And I can mention one example. The IADB is the technical secretariat for one initiative called RELAC, Renewables in Latin America and the Caribbean. It's 16 countries that initiative was created in 2019. The final objective of the initiative is to have 80% renewable energy in the power metrics of those countries by 2030. So it's a climate change platform, basically to exchange knowledge, but also to set these policy targets in the medium to long term. So I think that's a very important step because it defines even if there is a new political cycle, this is above those political cycles and that could provide some certainty in the long term.
That's one way to do it. Another way is, of course, trying to set up a very good regulatory and legal environment to derisk projects because at the end of the day, the cost of capital is higher in developing regions because the risks are higher. So one way to derisk projects is to provide some clear rules also mitigate the risk. And as a multilateral development bank, we are working together with governments on the public sector side, also on the private sector side, to provide guarantees, to provide some certainty and cover those risks.
For example, many distribution utilities in in Latin America who are the ones that pay the contracts for clean power plants, they are not really credit worthy. So we try to enhance the credit of those utilities by providing guarantees and other financing tools. And in that way, we can lower the cost of capital and provide a better bankability to those projects. That's the way we try to incentivize the sector and with innovative financing tools. But in the long term, we want to track the capital of the private sector because to cite a number, from 2018 to 2020, all multilateral financing in the clean energy sector in Latin America was less than 2% of the investments needed need by 2030 to reach net zero.
So it's a really small amount. We leverage other funds, climate funds and so on, but at the end of the day, we need to leverage private capital, institutional investors that are looking into having that impact in in the sector.
So that's the objective of our institutions. Because countries, because of all the fiscal constraints that they are having right now and as a developing region, they might have other priorities, not just the power sector...we need to leverage those additional resources to comply with SDGs and other climate goals in the long term.
Alex Dolan (Host, WRI) 13:21 – 14:00
I should note that the World Resources Institute also had colleagues on the ground at this year's CEM. And the themes that they were hearing were broken down into four different categories. They were hearing a lot about energy access needs, the second on critical minerals. The third theme came up that our colleagues heard a lot about was on the industrial transition. And the fourth was on power sector planning.
And so with that mind to these themes, I want to turn to Sylvana, do you have any thoughts about specifically this theme of industrial transition, how that was raised at this year's CEM?
Sylvana Bohrt (International Clean Energy Analyst, WRI) 14:01 – 16:25
Yes, thank you, Alex. In general, a key result and highlight of CEM this year was the endorsement of the CEM15 Joint Ministerial Statement, reaffirming member country's commitment to work collaboratively through the CEM to accelerate global energy transition, towards meeting energy goals and this kind of thing. So this pledge was strongly reaffirmed during ministerial discussions, underscoring the importance of CEM, of this platform, to deliver concrete outcomes in support of these ambitious goals.
So if we want to talk about industrial and transition, there were a few announcements that were important at CEM. One of them was the launch of the joint CEM MI gigatones by 2030 campaign. The launch of this 2030 campaign was a joint effort of the CEM carbon capture utilization and storage initiative and MI's carbon dioxide removal mission. This is aimed at supporting the acceleration of carbon management solutions ah to gigatone scale by 2030.
This campaign is focused on carbon management and the purpose is to bring carbon carbon management to the ministerial stage as a coordination platform between CEM and MI on carbon management and also share best practices and knowledge around carbon management.
Another initiative around industrial decarbonisation was the CEM, Industrial Decarbonisation Initiative, which launched a new guide to support governments in the implementation of this tool called Green Public Procurement Pledge. This instrument is a power policy tool to drive global decarbonisation of heavy industries. The intention is to create the demand that is needed for low and net zero emission in the sectors of steel, cement and concrete. This guide will share lessons learned by first mover governments and aims to support others just who are just starting this journey. So these are only a few examples of announcements, materials and partnerships that were made during CEM which are in line in accelerating the decarbonization and transition.
Alex Dolan (Host, WRI) 16:26 – 16:37
OK, great. And then moving to the fourth theme that I mentioned, power sector planning. Juan, do you have any thoughts about how the that issue came up at SAM?
Juan Paredes (Senior Renewable Energy Specialist, IADB) 16:38 – 19:20
When talking about energy policies, governments tend to be more reactive than proactive. So you just have to look at what happened in Europe. They lost 40% of energy due to an external war. So the energy transition is basically obliging governments to be more proactive and plan better in a more integrated way.
And what do I mean by integrated? That means to plan the generation expansion together with the transmission expansion in a more coordinated manner, or planning in cities the urban transport routes together with the power distribution utilities because of the electric mobility, or planning also cities, electricity, and heat networks. That's integrated planning. It's basically looking at the big picture and thinking ahead about all the possible ways how energy will interact with people in the future. And energy planning, as it was done in the past, did not consider things like climate change, resiliency, energy security, but now countries need to link that energy planning exercise, that traditional energy planning exercise not just with the decarbonization plans, but also have in mind all these other important aspects that might affect the energy availability in the future.
And there is also an important topic there, and it's about the tools that we need to do that energy planning. I was recently on a technical visit at the National Renewal Energy Lab in Colorado, and we were talking to experts and they were saying that the modeling tools in the power sector will be obsolete in 10 years. And why is that? Because the current generation system is based on rotating machinery, but a new system is based on inverters because inverters are the interface between the solar plants, wind energy plants, electromagnetic charges, and the distribution grid.
And those inverters are basically semiconductors, and they react faster. So we need a whole new approach to modeling. Even power system operators who are the ones who can control this balance between demand and supply, they're starting to witness some strange effects on the grid due to the proliferation of these inverter-based resources.
So we need to work together with governments to improve the human capacity but also have better planning tools and that's maybe an underestimated part of the planning exercise. But there is still a need, a lot we can do and support the governments in that endeavor.
Alex Dolan (Host, WRI) 19:21 – 19:38
The new implementing inclusivity framework and that is meant to get more representation in some of these decisions. And thinking about the human element and the and the workforce, how do you see that as playing a role in planning?
Juan Paredes (Senior Renewable Energy Specialist, IADB) 19:39 – 20:39
It's key. Let me just name one initiative. We, together with Green Climate Fund, we establish a financial facility for electric mobility in nine countries in the region. And it's $450 million dollars. But one of the important elements there is a council for skill development in electric mobility. Because in in many countries, of course, Brazil, Mexico, you have an established car industry.
And you need to reskill those people for these new jobs, for manufacturing electric vehicles or the maintenance of those electric vehicles that will be in our streets in the future.
So we have a very broad and comprehensive technical assistance program to work on a council for future skills in electric mobility because that has to be an integral part of the transition to so new technologies.
Alex Dolan (Host, WRI) 20:40 – 21:07
All right. Thank you. And since you brought up inverters in the grid, I want to broaden this up a little bit. And there there's been a lot of discussion, especially in the region, about how there is no transition without transmission. And that topic seems to be getting more traction. Where do you think the opportunities are in terms of investing in transmission distribution and even regional grid integration in the region?
Juan Paredes (Senior Renewable Energy Specialist, IADB) 21:08 – 26:27
Ana was explaining before, there has been an increase, basically a boom in solar and wind in the last decade in Latin America, in the Caribbean now. Almost 15% of the electricity consumed in Latin America comes from solar and wind. But that increase has not been matched in and by an adequate expansion of the transmission infrastructure to transport that generation to the consumption centers.
And this has been due to poor planning, the disconnection between the generation and transmission expansion. Also, slow permitting, Ana already mentioned that, licensing processes, all the community consultations that need to be done. And basically to build a new transmission line, it takes from 8 to 10 years. And that's too slow if we want to get all those power plants interconnected to the grid. So we know that we need more investments. Our calculations show that we need to triple investments in in transmission by 2030 or increase them by more than six times until 2050 just to meet the climate targets that the region is proposing. So in 100 years, Latin America has built something like 9 million kilometers of existing lines, and we need to double that in the next 25 years. So the challenges are really immense.
As a development organization, we're focusing on three main areas. The first one, providing more finance, of course, to transmission infrastructure, provide the speed and the scale, especially the speed, because this needs to be done in ah in ah in a faster way. We are working on regional interconnection. We just saw had the kickoff meeting for the regional interconnection system between Ecuador and Peru. It's going to be a new 500 kV line that would help, of course, the countries supply their electricity in times where, for example, hydro or there is not enough water for hydroelectricity production. Now Ecuador is facing some shortages and if there is an El Nino, for example, it will affect both countries in a different way. So really we see regional integration, regional interconnection systems as a key factor to integrate more renewable energy into the grid and offset those imbalances that we see because of climate change and extreme weather effects. So we have invested more or less $3.5 billion in the last decade in transmission infrastructure, but that's not enough because we know the needs are higher.
The second point that we're trying to work on regarding transmission is to determine the contribution of that infrastructure, of that asset to climate change. So we came up with this concept of green transmission line certificate, where we try to determine the percentage of the renewable energy that is being transported in a specific line. And why do we do that? Because in that way, we can show to impact investors, to institutional investors, that there is a value in investing in transmission and have access to that private capital as well, which we already mentioned it is important.
And maybe the third way, the third aspect that we're trying to promote in the region is to ah not to think always about expanding the transmission lines, the transmission system, but also optimizing the existing transmission assets and infrastructure. Because there is a new set of technologies that have been around for some time, but now with artificial intelligence and recent advances in the utilization, these technologies have gone more widespread. And they are grouped together under and under a new concept. It's called grid-enhanced technologies, or GETs. And basically, it's more sensors and detailed devices that you add to the existing transmission infrastructure to provide more capacity to transport more electricity.
By adding those sensors, you can, in some cases, increase the capacity of those lines by 30% or 50%, which is a lot. So you can delay the investments in new transmission and already get some financial benefit. Or basically, you can also change the conductors. It's called re-conductoring, but that's a new technology because of progress in material science. and You can transport more electricity along the same existing lines and you need to deal with environmental issues or permitting because you are using the existing paths for the lines. So we're trying to develop some pilots and support some investments in that regard. And that's maybe in a nutshell how we are trying to support the transmission sector because we know it's key to achieve those climate targets in the medium and long term as well.
Alex Dolan (Host, WRI) 26:28 – 26:49
I'd like to turn to my WRI colleague Sylvana again for another perspective on the region. So in the past few months, WRI has engaged with a number of stakeholders in the region on the energy transition. And so Sylvana, what have we learned? And can you speak a little bit more about that project and what the insights are that's come out of it?
Sylvana Bohrt (International Clean Energy Analyst, WRI) 26:50 – 29:22
Yes, thank you, Alex. So as you said, well, WRI has been working on a scoping analysis aimed at exploring potential opportunities to leverage corporate energy buyers to support policies across LATAM. The intention is to increase the purchase of RE (Renewable Energy), improve their region's energy security and attract investment in industrial development. So to this end, our team explored the value-add of having a unified coalition of latter corporate voices, comprised by buyers, developers, financiers that can advocate for regulations and policies that can allow RE to be consumed at the scale needed to achieve climate targets in line with the parties with the Paris climate agreement, but also aligned with the country’s long term strategies and plans.
So for this study, we have conducted more than 32 interviews with key stakeholders in five countries, Argentina, Chile, Brazil, Colombia, and Mexico. And we interviewed people from different sectors, including energy suppliers, project developers, industrial and energy associations, people from NGOs, consultancy firms, and energy buyers. And we learned that while many countries in LATAM are making a strong headway for the energy transition, there is still a need to continue doing more progress to make this just transition a reality, right?
And we've been hearing a lot from multiple stakeholders in the region that having a unified strong voice to demand for enabling regulatory frameworks for RE deployment and financing would be very valuable to exchange information, experiences and lessons.
Decarbonizing, the economy and the energy transition right now is a huge opportunity in the region that will not be achieved without the active collaboration of public and private sectors, research and educational institutions and other partners. We need to find ways to create synergies, and we at WRI are always looking at finding opportunities to make partnerships with multiple collaborators. This to avoid duplication of efforts, because there are many things happening in the region, but also we are looking to lean on each other's strengths, on other partners' strengths, to find the most efficient and cohesive solutions to advance on the energy transition.
Alex Dolan (Host, WRI) 29:23 – 29:32
How do you see some of these insights in the context of the lead up to this year's COP and next year's COP? What are we hoping to get out of, what are you hoping to see at this year's COP?
Sylvana Bohrt (International Clean Energy Analyst, WRI) 29:33 – 30:41
For example, for commercial and industrial consumers in LATAM, these account for approximately 60% of electricity use. This is even higher in countries like Mexico and Brazil. For example, this represents an opportunity to accelerate the energy transition by shifting this block of consumers to renewables. And while there is a growing number of companies who are setting ambitious targets, their supply chain partners are not doing so at the same pace. Therefore, engagement of supply chains will be needed to reach a broader set of corporates.
We also need to consider to engage the hard-to-abate sectors to provide support with innovative solutions, since these sector so sectors will be critical to deepen reductions in supply chain emissions over the long run. So in light of the COP later this year, I would say there are huge expectations about how to tackle Scope 3 operations and how can we engage supply chains to decarbonize the sectors.
Alex Dolan (Host, WRI) 30:41 – 30:57
As we start winding down, I'm going to ask the same question to Ana. Ana, how do you see, you know this year's COP as being the finance COP, what are you hoping to see play out at this year's COP and possibly next year's COP in Brazil?
Ana Teixeira (Country Transition Analyst, BloombergNEF) 30:58 – 34:43
I would like to actually focus on next year's COP. So first of all, I think next year's COP represents a pivotal moment for Brazil. So it has a quite ambitious climate agenda. And if we can possibly implement it, it really could reshape the way strategies are made worldwide, also providing of course changes to the economy, creating opportunities and growth in industry instead are needed for the energy transition.
So I think the first point I'd like to highlight is that Brazil is not alone, so it also brings LATAM with it. LATAM is smaller in size if we look at Asia and if we look at policy-wise announcements in the United States and the EU. But next year's COP is also an opportunity for LATAM to take space and to facilitate exchanges across the region and across emerging markets. I think the tripling agenda has a huge play to part in next year's COP and this year's COP as well.
But while the world needs to triple, every market has a different path so that we can all move to the tripling renewables. And I think that LATAM specifically has a different way to play. If we look at BNF's forecasts, we expect that natural gas will still be very present in the next few years, up until 2050, but solar and wind will grow exponentially. And as Juan was saying earlier, we're seeing all this growth, but we don't have the transmission capability to attend to it, and we need to see that progress. So I expect that this is something to be discussed and to be played out.
Beyond renewable energy deployment, I think clean energy solutions as well are important. So if we look at hydrogen, Brazil recently passed a hydrogen law on August 2nd, that offers tax exemptions, and it does take a technology-neutral approach, but Brazil's introduction of the law is a way to kickstart that industry. And although there's still a lot of steps to be able to actually drive this industry, it's a first step. And we also have discussions on hydrogen for Chile as well. And if we look at energy planning, hydrogen is a key movement, as well as offshore wind law discussions for Brazil. And we also see that something similar coming from Colombia.
If we discuss critical minerals, we could highlight Chile, Bolivia and Brazil as key players on this as well. And if we consider biofuels, Brazil is already the second biggest producer of ethanol in the world. It has a sizable biofuels industry and if it keeps progressing with it, it can bring numerous high-value, low-carbon products to the market that could range from sustainable aviation fuels like bioplastics as well.
And if we consider that the Clean Energy Ministerial and these discussions were a platform for cross-pollinization of ideas, we could also talk about small-scale solar driving growth in emerging markets with Brazil's net metering boom being a clear highlight on how small-scale solar can be implemented in a decentralized way to make solar available in emerging markets.
Alex Dolan (Host, WRI) 34:43 – 34:49
Juan, what are your thoughts about what you expect to see or hope to see at this year's COP or next year's COP?
Juan Paredes (Senior Renewable Energy Specialist, IADB) 34:50 – 37:22
Yeah, thank you, Alex, for the question, and I think Ana touched upon some very key aspects regarding the energy transition in Latin America. And just so we are and on the same page, we understand energy transition as an energy substitution because at the end of the day, we want to get rid of fossil fuels because of emissions, of course. And in Latin America, as a developing region, energy demand has been increasing, especially after after the pandemic. And that they increased in non-conventional renewables or solar and wind is just an addition on top of the existing hydropower in in Latin America and some fossil fuels. But Latin America as a whole, as a region, we haven't started that process of energy substitution. And what Ana mentioned about the natural gas discussion in some countries is very relevant for that -- that has implications in terms of policymaking as well. We need to start thinking about the substitution now, because we are adding just clean energy but not replacing the fossil energy that we already have. So I would like to see more ah concrete efforts in that regard.
There are some examples, good examples in the region. Chile, for example, phased out coal a couple of years ago. We are working with some other development banks in the Dominican Republic to have an investment plan for phasing out coal generation, and electricity generation from coal as well. So I would like to be, for governments to be more proactive in in that regard.
But we are also looking into other aspects that need to be considered because this transition needs to be a just transition. And it doesn't make sense to talk about decarbonization in a region when 17 million people still don't have access to electricity.
So access, energy access is key for us to make this transition, a just transition as well. And 80 million people don't have access to sustainable cooking fields. So these opportunities, development of technology with biofuels and other fuels for cooking are also very relevant for Latin America. That's something that probably in this forum is not discussed properly, but we consider all these are aspects that belong to the energy transition concept in general.
Alex Dolan (Host, WRI) 37:23 – 37:30
I'd like to thank all three guests. Ana, Sylvana, Juan, thank you so much for the discussion.
Juan Paredes (Senior Renewable Energy Specialist, IADB) 37:31 – 37:32
Thank you, Alex, for the invitation.
Sylvana Bohrt (International Clean Energy Analyst, WRI) 37:32 – 37:33
Thank you, Alex.
Ana Teixeira (Country Transition Analyst, BloombergNEF) 37:34 – 37:36
Thank you guys. It was a pleasure to be here and meet you all.
Alex Dolan (Host, WRI) 37:37 – 38:24
I'd like to give a call out to a number of resources that we will include in the show notes for this episode. That includes two fact sheets from Bloomberg NEF. One is on the Brazil transition and one is on the broader energy transition. Those will be included as links in our show notes. In addition to that, there are a number of energy transition resources that the IADB will have. We will include those links as well.
This episode was produced and edited by Daniel Baker. Thank you to all of our guests who made this episode possible. For my colleagues at WRI, my name is Alex Dolan. Don't forget to leave us a five-star rating on whatever podcast streaming platform you listen to this on. Every review counts. And thanks for listening.
