Latin America and the Caribbean already generates 61% of its electricity from renewable sources, twice the global average. Yet the region attracts only 15% of global renewable energy investment, and the Inter-American Development Bank estimates it will need more than US$577 billion in clean energy infrastructure by 2030.
A new UNU-CRIS Research Report by Associate Research Fellow Germán C. Prieto argues that no country in the region can close this gap alone. It identifies the main obstacles: high capital costs, weak transmission networks, skills shortages, fragmented carbon taxes and policy gaps. In Chile alone, inadequate grids have caused more than 5.9 TWh of clean energy to be lost.
The report then tests the case for building regional electricity markets. Its econometric analysis finds they do little to cut investment costs, but their real value lies elsewhere: regulatory stability and energy security.
Assessing six regional schemes, the report finds SICA furthest ahead, with its SIEPAC interconnection system and 2030 Sustainable Energy Strategy. CARICOM, the Andean Community and MERCOSUR show potential, while the Pacific Alliance and CELAC lag behind. Paradoxically, MERCOSUR hosts the region’s most interconnected systems, yet manages them bilaterally rather than through common rules.
The report urges governments to harmonise regulation, seek multilateral financing as a bloc, and treat energy security as a shared regional concern rather than a matter of national autonomy.
Its message to policymakers is clear: deeper energy interdependence would not only accelerate the transition, but could also help sustain regional integration itself, in increasingly turbulent times.