How to Improve Energy Efficiency in Latin America

Vast sectors of the population connected to the grid—which before the 1950s were outside the scope of public services—, together with industrialization processes, has resulted in a massive increase in energy use.

This has forced countries to invest in energy efficiency to provide good service to their population and to ensure supply for productive sectors.

According to the Energy Efficiency 2019 report of the International Energy Agency (IEA), in 2018 the world could have saved USD 4 billion in energy, had it managed to achieve a 3% improvement in energy efficiency compared to the previous year.

We can define energy efficiency as optimization in energy use in products or services. Energy efficiency does not mean sacrificing our comfort or that we have to stop producing the goods and services that we require in order to reduce energy consumption, but that we can have equal or greater comfort using less energy.

For example, we can switch from 60-watt incandescent lightbulbs to LED bulbs that provide equal or better lighting and consume just 4 or 5 watts.  Efficiency in this case has been enormous, as has the potential for other economic sectors.

Another example. A program that revamps old hydropower plant turbines can increase efficiency in a way that would improve generation at the same site with the same infrastructure. Or we could devise a program to shut down gas cycles by at power plants installing a steam turbine that uses the heat produced by gas turbines (combined cycle). These programs would help improve energy efficiency on the supply side.

But we can also act from the demand side. With the oil crisis of the 1970s, car makers were required by law to improve the mileage on their vehicles. Today, such standards requiring constant improvements in vehicle performance are still in place.

In the construction industry, we can also have programs that increase efficiency.  In the past, home construction incorporated climate conditions into their design. In hot climates, for example, houses were built with thick walls and high ceilings, some had interior courtyards, in an effort to ensure a comfortable temperature inside.

IEA studies show that with existing energy efficiency technology the world can achieve a 40-percent reduction in greenhouse gas emissions. Increased urbanization and higher density in large cities have resulted in a rise in construction of homes and office buildings, which until recently did not take energy consumption into consideration.

Today, however, there are a number of methods available to improve energy efficiency in buildings. For example, standards may be issued that require new buildings to have energy consumption modelling and building codes to improve energy efficiency, or to require the disclosure of home energy consumption rates and make it available to tenants.

Another example of demand-side action is participation in auctions to add new generation capacity, but offering “negawatts” instead of megawatts. Negawatt traders offer verifiable programs that were applied for certain periods to demonstrate that through improvements in energy efficiency they were able to reduce consumption by a previously agreed amount.

To achieve greater energy efficiency in Latin America, CAF prepared a free online course (MOOC) in collaboration with the International Energy Agency (IEA). The MOOC’s goal is to provide planning, policy and finance tools to help overcome barriers to achieving energy-efficient buildings. The interdisciplinary and practical approach applies fundamental concepts to real-world examples of Latin America and the Caribbean, as well as the rest of the world. This free, public, 30-hour course starts on April 22.

Based on the above, countries not only have to design programs and projects for the incorporation of renewable energy, but comprehensive programs to improve energy efficiency in all aspects of economic life must also be considered to meet their goals in terms of sustainability and emission reduction.