The change in the energy matrix represents a profound transformation in energy production and consumption, a change that is not just necessary but urgent. This transition, which was agreed upon on 4 November 2016 with the Paris Agreement, is a significant milestone in international cooperation and is based on renewable sources such as solar, wind, hydroelectric, geothermal, and biomass.
Argentina relies heavily on hydrocarbons to meet its energy demand (87.5% of its energy matrix is fossil fuels). Despite significant oil reserves, its domestic production cannot meet its demand, so it depends on energy imports. It has extensive reserves of both conventional and renewable resources, giving it great potential to become a key player in the global energy transition.
China is the world's leading producer and buyer of electric vehicles (EVs) and electric buses (EBs) and has been the first to electrify its private and mass passenger transport. This fact has intensified trade disputes between China and the US, where China is the world leader.
This paper seeks to provide an overview of Central America's geo-economic reconfiguration, emphasising energy issues. As of 2019, El Salvador and Nicaragua seem to be leaning towards China. There is a need for investment in infrastructure for the extension, adaptation and diversification of energy sources in the region.
The energy transition in Latin America has the structural problem that has been dragging on in the region for ever: the lack of capital. To solve this, external financing has been the main driver of the change in the energy matrix.
The main financiers are the Export-Import Bank of China, the China Development Bank, the Inter-American Development Bank (IDB), the Development Bank of Latin America (CAF) and the U.S. Agency for International Development, in that order.
It should be noted that the Caribbean Basin is mainly financed by the USA and South America by China. Although the U.S. finances renewables more than dirty energy, in terms of amounts it does not compare with the Asian economy. External financing for renewables is vital for Latin America's energy transition. It should not be forgotten that Latin America is a disputed territory and the control of renewables is key.
The last COP26, held in Glasgow, Scotland, sought to establish agreements that would define commitments to reduce greenhouse gases, and thus face climate deterioration. With not very sharp proposals and almost no action plans.
According to the latest Report on Climate Change, published by the IPCC, it is necessary to maintain the temperature increase limit at 1.5 ° C to avoid the irreversible loss of biodiversity. However, the little cooperation of the countries that pollute the most and the promises without plans of action keep the global climate issue adrift.
The countries that contribute the most to the climate crisis, through the relocation of oil production and exports, are precisely those that refuse to commit to lowering their emissions and paying for damages; which leaves countries affected by climate change in an even more vulnerable position and without the possibility of mitigating its effects.
The global change of the energy matrix gained momentum in the 2010s thanks to technological advances for electricity generation with renewable energies; international agreements in favor of the environment; and climate change.
Latin American countries are in the process of changing the global energy matrix and have had several advances. The COVID-19 pandemic paralyzed the world and the economy. Latin America was no exception and it seems that this may have slowed down renewable energies.
The energy transition in Latin America is underway. Government incentives and continued Chinese investments and loans will be key to its development.
The energy transition has made lithium a critical element. In Latin America it is a priority issue that gained strength since the beginning of the second decade of the 21st century. The energy transition has forced the use of technology and inputs other than those related to hydrocarbons.
Lithium has gained an important place in the dispute for world hegemony. Since lithium was recognized as a key element for the energy transition of the vehicle fleet, it began to be considered as a strategic material.
Latin America stands out for its immense lithium reserves. Bolivia, Argentina and Chile are the three countries with the largest reserves of this material. Lithium and its exploitation in the region is a clash of interests. While the countries of the region themselves seek to take advantage of the growing demand for lithium to obtain fiscal resources from its exploitation, developed countries ensure access to it for the production of rechargeable batteries.
The energy outlook is complicated by the drop in demand during confinement, especially for fossil fuels; however, the importance of oil remains crucial. China is the central player for both the global oil industry and the major player in terms of clean energy sources.
Economies such as Colombia, Venezuela, Ecuador and Bolivia are heavily dependent on oil and gas exports; while Mexico and Brazil depend for their tax revenues on the oil companies Pemex and Petrobras.
The panorama shows a dispute between dirty and clean energies in a conjuncture of both energy change and crisis in energy demand. The crisis due to the pandemic may mean a boost to the transition towards cleaner energies under the leadership of China.
The international commitments of the United Nations Agenda 2030 have forced governments to rethink public mobility policy around the world. The change in public transport systems to electric units has put on the table the importance of China as an exporter of these units and the demand for global oil demand in the long term.
Of the total number of electric buses in the world, 95% are in China. From 2011, the change of energy matrix is a public goal, becoming the main producer and consumer of electric vehicles in the world. In Latin America, the use of electric buses is still incipient.
This energy shift will be the new impetus for the growth of the global economy in the 21st century. It will also be an issue of confrontation between the United States and China; and of Latin America with the United States.
