Climate Change: Latin American Hydroelectricity


Climate change is expected to have a major impact on Latin American hydroelectricity, the region’s leading energy source. Hydroelectric power provides 45% of the region’s energy supply. It is expected to grow further to enable the subcontinent to achieve its sustainable development goals and reduce its carbon emissions.

A new report from the IEA attempts to analyze the impact of climate change on more than 86% of the installations in the sector in 13 countries with the largest hydroelectric capacity.

Focus on the adverse effects of climate change on Latin American hydropower and the resilience measures put in place.

Climate change threatens the continent’s largest source of energy supply

196 GW of hydroelectricity: 45% of the regional electricity supply

Climate change is changing the Latin American energy landscape. On this continent, hydroelectricity is the main source of electricity production. It represents 45% of the total electricity supply.

The total installed hydroelectric capacity is thus 196 GW in 2019. This has allowed Latin America to become the region with the largest share of renewable energy (RE) production in the world.

The IEA report predicts that hydropower in Latin America will remain important and will likely increase until 2040. In 2019, the region had the fastest rate of hydroelectric growth. It has thus become the second region with the highest added capacity in the world.

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The SDGs promote the development of hydroelectricity

Beyond the spatial characteristics of the region, the
Sustainable Development Objectives
for 2030 of the United Nations are a determining factor in this trend. As the main source of carbon-free electricity, hydroelectricity plays an essential role in the fight against climate change.

It also offers a cost-effective flexibility solution to balance the variability of other RE. Finally, the study highlights the positive impact that hydraulic facilities can have, under certain conditions, in regulating water sharing.

However, climate change could well jeopardize the Latin American model based on hydroelectricity even before it reaches its objectives.

– 8% increase in production capacity over the period 2020-2059

The study compares the hydroelectric generation capacity of each country between 2020 and 2099 with that of the period from 1970 to 2000. It shows that hydroelectric production capacity will decrease by an average of 8% over the period 2020-2059 compared to the years 1970-2000. Production will be 11% lower on average over the end of the century, compared to the same reference period.

The IEA assessment analyzes three different scenarios. Scenario 1 in which the global average temperature will remain below 2°C by the end of the century. Scenario 2 in which the average temperature will be below 3°C. Finally, scenario 3 in which the temperature will be above 4°C. Each of these scenarios represents a different level of greenhouse gas (GHG) concentration.

The comparison of the three scenarios shows that an increase in GHGs, and therefore in temperature, increases the negative impacts on hydroelectric production.

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How is climate change impacting Latin America’s hydroelectric production?

More frequent extreme weather events

The IEA report cites rising temperatures, fluctuating rainfall, melting glaciers and an increase in the frequency of extreme weather events. These hazards will affect all of Latin America but in a very heterogeneous way, making projections very uncertain.

However, the IEA study states that hydroelectric production will suffer everywhere due to water flow movements. Whether it’s flow variability, seasonal flow shifts, or increased reservoir evaporation.

In addition, the various hazards will increase sediment deposition. Eventually, this will reduce the capacity of the dams and may even make them unusable.

Infrastructure exposure and vulnerability

These hazards can also cause physical damage to infrastructure. The study mentions, among other things, the torrential rains that severely damaged the Callahuanca hydroelectric plant in Peru in 2017. The damage was so devastating that the plant had to be closed for two years.

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50% of Latin America’s hydroelectric infrastructure is over 30 years old

The potential damage from weather events is of particular concern because many of the infrastructures are aging. The technical life of a facility in Peru is between 81 and 104 years, while world standards range from 30 to 80 years. More than 50% of the hydroelectric infrastructure in Latin America is over 30 years old.

Public policies at the heart of the solutions proposed by the IEA

The IEA report proposes a set of solutions for states to ensure the sustainability of their hydropower systems. It points to public policies as a determining factor in the implementation of necessary reforms.

Putting climate resilience at the heart of energy policies

Governments can first integrate the climate resilience of their electricity systems into their national energy policies. In particular, the IEA encourages them to adopt regulations to support climate resilience initiatives.

Currently, only 6 of the 13 countries studied have integrated the climate impact on hydropower into their national energy policies and have suggested actions in their adaptation plans for the sector.

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Mobilize investment in the modernization of hydroelectric plants

The study notes that access to financing for hydropower plant upgrades is too often a problem. Private investors tend to avoid this type of project. Doubts about climate change and state ownership of infrastructure are cited as explanations for this reluctance.

The study therefore encourages the development of public/private co-financing as a way to attract private investment. The IEA also encourages fee-based Public Private Partnerships for the same reasons.

Finally, it recommends that states and international financing organizations such as the Inter-American Development Bank (IDB) take on the riskiest part of the investments.

Develop insurance against climate risks

Although utilities have an interest in insuring their assets against the effects of climate disruption, they are reluctant to pay high insurance costs. In addition, insurance is too often limited to covering damage to property and loss of income, rather than covering the broader damage to society and the economy.

The IEA analysis encourages the development of affordable insurance against climate risks. It calls on governments and public institutions to support these financial tools to avoid excessive burdens on public services.

Supporting scientific research

According to a World Bank study, a resilient infrastructure project built without prior data on climate risks will cost ten times more than a project with sufficient information. This is especially true in Latin America, where the impact of climate change varies greatly from one region to another.

The IEA therefore calls on governments to support scientific research on future climate models and their impacts. It encourages them to provide significant financial support for climate research. It also calls for improved access to national climate data sources and constant updating of information systems.

In addition, hydroelectricity is expected to remain the leading source of energy in the subcontinent despite these threats. These could, as in other regions of the world, also become geopolitical problems. The water resource is generally shared between several nations, like the African continent which is torn on this subject.

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