Siemens Energy and global strategic management consultancy Roland Berger teamed up to prepare the Energy Transition Readiness Index in Latin America

Accelerating the expansion of renewable energy, where technology is advanced and costs are competitive, is high on respondents' priority list.

The Energy Transition Readiness Index highlights Latin America's opportunity to become a global power. The study is the result of feedback from approximately 530 regional and global business leaders, policy makers and government representatives from various sectors who participated in Latin America Energy Week 2022, a series of conferences hosted by Siemens Energy to discuss regional challenges and opportunities for energy transition.

The survey pooled the experts' responses on each of 12 predetermined key energy priorities, matching the progress of each priority ("readiness") with an assessment of their respective importance ("system maturity"), as measured by the average importance of all the priorities.

The report, which describes readiness on a scale of 0 to 100%, found the region currently ranked 22% in the Index. This indicates that while Latin America has a solid foundation to expand its influence in the global energy transition, the region will need to create the right conditions to do so, with greater regional integration that makes clean energy exports a strategic priority.

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“In a “Race-to-Zero” scenario, Latin America has the potential to become a major global provider of clean energy, as well as a strategic supplier of sustainably labeled food to other continents. Therefore, it is in the region's interest to establish transnational alliances according to systemic thinking, which considers not only local value chains, but also global demand”, said André Clark, Senior Vice President of Siemens Energy in Latin America.

The survey also revealed a gap between perceptions and reality regarding progress towards decarbonisation: Participants estimated that the region's emissions have fallen by an average of 17% from 2005 to date, while only four in ten participants correctly indicated that there was no reduction in emissions. The reason for this discrepancy, according to the study, is the result of public debates about the initial measures for decarbonization already underway, when, in reality, the current increase in these emissions nullifies any potential reductions achieved by these measures so far.

This gap is also reflected in future ambition levels, which respondents expect to fall by 37% by 2030 compared to the 2005 level, a highly ambitious percentage. Globally, Latin America contributes little to climate change, accounting for just 5% of global CO₂ emissions in 2020. However, emissions grew by around 20% between 2005 and 2019, driven by economic expansion and greater demand for energy .

Priority areas and current progress

Conference participants considered all of the energy priorities set out in the report to be very important to achieving climate goals. At the top of the list is accelerating the expansion of renewable energy, where technology is already advanced and costs are competitive, making implementation relatively straightforward.

Participants also saw the integration of renewable energies into the electrical power system, which also requires storage solutions, as a priority task. In addition, they consider the decarbonization of the industry as an urgency: If this is done satisfactorily, it will allow economic growth without increasing emission levels.

According to respondents, current progress in achieving energy priorities in Latin America has been slow. Although there have been developments in the area of ​​power generation, the installed capacity for solar and wind still leaves room for broader implementation in the future.

The survey also reveals some blind spots for the participants. High impact areas, with little progress achieved, include the implementation of energy storage solutions and the development of new business models.

“Latin American countries must associate energy transition initiatives with innovation. The solution, in this sense, is to strengthen collaboration between traditional and new players in the sector, such as startups and universities. Since energy is traditionally highly regulated and requires high capital investments, these partnerships require cultural efforts from both parties to be effective”, says Georges Almeida, Partner at Roland Berger.

Opportunities on the horizon

Most countries in Latin America enjoy abundant and high quality sources of wind and solar energy, which allows generating energy at highly competitive costs. While the region has a golden opportunity to further develop its role as a reliable exporter of green energy, particularly hydrogen, any move in this direction requires regulatory support.

According to respondents, to develop its full potential, Latin America needs to implement regulations to direct investments and ensure improvements in infrastructure, while making clean energy exports a strategic priority.

After policies, participants chose finance as a priority area. They see the need for action in the area of ​​finance as particularly high for renewable energy sources. In this area, according to participants, the regulatory regime also needs to be adjusted to create more investment opportunities.

The Energy Transition Readiness Index is part of a global collaboration between Roland Berger and Siemens Energy to develop valuable data to inform key energy transition strategies. A global version of the report, including views from all regions, will be released later this year.

The Latin America Energy Transition Readiness Index and its methodology are available at this link.

About Siemens Energy

 is one of the world's leading energy technology companies. The company works with its customers and partners on energy systems for the future, thereby supporting the transition to a more sustainable world. With its portfolio of products, solutions and services, Siemens Energy covers almost the entire energy value chain — from power generation and transmission to storage. The portfolio includes conventional and renewable energy technologies such as gas and steam turbines, hydrogen-powered hybrid power plants, and power generators and transformers. More than 50% of the portfolio has already been decarbonized. A majority stake in listed company Siemens Gamesa Renewable Energy (SGRE) makes Siemens Energy a global leader in the renewable energy market. It is estimated that one-sixth of the electricity generated worldwide is based on Siemens Energy technologies. Siemens Energy employs approximately 91.000 people worldwide in over 90 countries and generated revenue of €28,5 billion in fiscal 2021.

About Roland Berger 

It is the only European heritage management consultancy with a strong international presence. As an independent company, wholly owned by our Partners, we operate 51 offices in all major markets. Our 2.700 employees offer a unique combination of analytical approach and empathetic attitude. Driven by our values ​​of entrepreneurship, excellence and empathy, we at Roland Berger are convinced that the world needs a new sustainable paradigm that takes into account the entire value cycle. Working in cross-skill teams across all relevant industries and business functions, we provide the best expertise to address the profound challenges of today and tomorrow.

Source: Jordan Fraiberg Via In Press Porter Novelli