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.
The crisis over COVID-19 has hit the world economy as a whole. This note reviews the effects on the oil industry, the fall in the volume of world supply and demand, and the prices of crude oil quoted on international markets.
After the collapse of the oil price, a recovery in the energy sector will depend on the improvement in the price and the speed with which it is achieved. Prices are expected to remain low, and the sector is expected to suffer despite the market recovery.
In view of this negative environment in the industry, the possibility of greater investment in alternative energies and consequently a deepening of the change in the energy matrix must be envisaged.
The change in the energy matrix led by China is not limited to the generation of electricity through clean energy. The market for electric cars, buses and motorcycles is booming. Since 2016 China is the country with the highest domestic sales of electric cars and by 2019 it is the largest exporter of electric cars, motorcycles and buses in the world.
There is an incipient process of change of the automotive plant in Latin America essentially led by China and although small it is accelerating.
In Latin America, the electric car market is emerging. To reduce the carbon footprint, the governments of Latin American countries implemented measures to stimulate the consumption of electric cars
The change in the energy matrix plays a fundamental role in the development of the trade war. Photovoltaic cells and solar panels have been subject to various US sanctions as a tool against Chinese expansion in this sector.
The Chinese government, on the other hand, has launched a plan to generate renewable energies on a massive scale, and considers innovation and the search for alternative energy sources as strategic emerging industries.
In Latin America there are large projects such as Cauchari in Jujuy, Argentina, in Chihuahua, Mexico, as well as in Chile and other countries