According to KPMG, in his study “Energy Transition in South America”, the region covered is emerging as a leader in the transition to sustainable energy. In these countries, these resources have a share of more than 30% in the primary energy matrix and approximately 70% in the electricity generation matrix.
Furthermore, in countries like Paraguay, Brazil, Uruguay and Colombia, renewable sources already for, respectively, 100%, 78%, 70%, and 65% of capacity installed of generation of electricity.
The research, based on data from the Energy Institute, its most recent review of global electricity market statistics, and an analysis of the period 2010 to 2022, indicated annual growth rates in renewable energy generation of 4%, 6% , and 9% in the years 2020, 2021 and 2022, respectively. A 20% jump in renewable energy generation capacity (from 220 million to 265 million kW) was also noted in the same period.
According to KPMG, the energy transition in South America represents a significant opportunity to expand access to low-carbon energy and discourage the use of fossil fuels.
“However, to fully harness this potential, it is crucial to overcome current barriers and improve infrastructure, ensure financial stability and deal with socioeconomic issues to further drive the energy transition”, states Manuel Fernandes, lead partner of the energy sector. KPMG Energy and Natural Resources in South America.
The lack of speed in implementing sustainable means of generating electricity was identified as the most urgent challenge to achieving established climate goals, according to 82% of the study's total respondents and 89% of South American respondents.
“This significant consensus reinforces the critical need to address the obstacles that currently impede the rapid adoption of clean sources”, declares Anderson Dutra, the lead partner for Energy and Natural Resources at KPMG in Brazil.
In this sense, the study identifies persistent challenges, such as the need to improve policies and regulations, facilitate access to capital, accelerate project implementation and mitigate environmental impacts. South American sector leaders also emphasized the urgency of eliminating fossil fuel subsidies and strengthening policies to encourage clean energy.
In the area analyzed, there is a clear trend towards the development of these energies, justified by investments and the application of a diverse set of initiatives that have gained space in the energy matrix, generating positive expectations for this market.
Continuous collaboration between the public and private sectors, the improvement of stimulus policies and the focus on overcoming identified challenges are essential to foster and accelerate this transformation process towards a more sustainable future.
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