South America’s shift towards renewable energy can unlock new opportunities and drive sustained progress, according to the new Regional Energy Transition Outlook South America released by the International Renewable Energy Agency (IRENA) at the United Nations Climate Conference COP30 in Belém, Brazil.
The Regional Outlook evaluates the integration of renewable and low-carbon technologies into the energy system across 13 South American countries.
It was developed in close collaboration with regional partners like the Inter-American Development Bank (IDB), the Latin American Energy Organization (OLADE), and the Economic Commission for Latin America and the Caribbean (ECLAC).
It provides guidance for policymakers in the region to support their national energy planning and the preparation of Nationally Determined Contributions (NDCs), as well as inputs for local infrastructure and investment planning.
It also offers private sector insights for strategic planning and risk assessment.
Need to ramp up investment in renewables
According to the Regional Energy Transition Outlook South America report, to achieve its energy transition goals, South America needs to ramp up investment in projects and expenditure in goods for end-use applications to an average of US$500 billion per year through 2050.
At present, the region does not attract sufficient investment for the energy transition, receiving US$58 billion in 2024, which represents only 2.5 percent of the global total of US$2.4 trillion.
Accelerating the energy transition would bring net economic and societal benefits that substantially outweigh the upfront costs.
IRENA’s decarbonisation pathway shows that the region could increase its GDP growth by an additional 1.1 percent per year over the period 2023 to 2050 compared to current plans, while creating more than 12 million jobs in the energy sector.
By 2050, renewables could power nearly all of South America, but only with stronger grid connections and major investment to electrify homes, transport, and industry. The shift opens huge opportunities to build resilient local supply chains, boost manufacturing, and create high-quality jobs in renewables, grids, and clean technologies, said Francesco La Camera, Director-General of IRENA.
Globally, a record 582 GW of new renewable energy capacity was added in 2024. For the first time, investments in renewable energy surpassed those in fossil fuels.
South America contributed strongly to this trend, adding 23 GW of renewable capacity and reinforcing its position as one of the most cost-competitive regions for renewable energy.
As oil and gas jobs decline, new employment in clean energy will more than make up the difference. The transition also means less reliance on fossil fuels, stronger energy security, and healthier trade balances. South America’s energy transition isn’t just unstoppable, it’s a once-in-a-generation opportunity for business and society to drive green industrialisation and unlock growth, Francesco La Camera highlighted.
The power sector is undergoing a shift to renewables
South America’s power sector is already undergoing a decisive shift toward renewable energy and has the potential to generate up to 98.5 percent of its electricity from renewables by 2050.
Reaching this level requires adding up to 55 GW of renewable capacity each year, more than double today’s capacity addition pace, with solar and wind leading the expansion.
Furthermore, ensuring energy security in the region will require substantial investments in storage, back-up capacity, and new grid infrastructure to manage variability and maintain reliability.
Coordinated planning, investment in cross-border interconnections, and regional ancillary service markets can also play a significant role in reducing pressure on domestic systems and ensuring the stability of supply.
To leverage the continent’s comparative advantages, IRENA proposes seven regional energy-focused actions, including enhanced grid interconnection, integrated electricity markets, supply chain strategies for solar and wind, coordinated development of green hydrogen and sustainable biofuels, and targeted strategies for industrialisation and energy efficiency.
