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and economic point of view for Central Amer- ica and the Caribbean, resulting in cost reduc- tions to consumers of 15 percent to 20 percent. In Central America, this will require investing in new gas-fired electricity generation and ei- ther interconnections to the gas pipelines of Mexico or Colombia, or the development of an LNG or CNG offloading facility at a region- al port. Panama currently provides the lowest cost options for sea-borne LNG or CNG. In the Caribbean, this will require additional invest- ment in pipelines or ports, power generation infrastructure, and possibly vehicle retrofits to use natural gas.12 4. Further electric grid integration: Central Amer- ica already has an integrated grid through SIE- PAC, but for it to become a source of lower cost energy for this region, it needs to draw on Mex- ico’s grid to the north or connect to Colombia’s to the south. Both interconnections would pro- vide the region access to lower cost electricity. Projects to accomplish this have been planned and partially financed, but are not yet a reality. 5. Improved energy efficiency: Both Central Amer- ica and the Caribbean have a considerable way to go in ensuring the integrity of their electri- cal power grids and efficiency in power genera- tion, transmission and use by consumers. Elec- tricity theft or losses to unmetered end-users, which increase the cost for paying customers, are problems across the region. New energy ef- ficient appliances used in homes and business- es as well as better monitoring of the end-user base could be as important as any single invest- ment in additional power generation capacity. 6. Renewable energy sources: Wind, solar, bio- mass, and geothermal power generation are becoming increasingly affordable and some technology options have reached grid parity in terms of the cost to the consumer. Renewables can be installed as large-scale power genera- tion facilities, such as dams or wind farms, but some technologies are also efficient on a small scale that is suited to distributed power genera- tion at consumer sites. Distributed small-scale installations also offer the opportunity to de- velop microfinance alternatives for consumers. In the long run, it makes sense for Central Amer- ican and the Caribbean states to transition to an energy infrastructure that combines improved ef- ficiency, use of renewable energy sources, and nat- ural gas power generation to reduce demand for oil. High Central American and Caribbean energy production costs have been a focus of internation- al attention for years, yet progress has been slow. Since 2009, the Energy and Climate Partnership of the Americas has been exploring connectivity among small island states in the Caribbean and has worked to facilitate shifts to renewable sources of energy.13 Connecting the Americas 2022 brings together the OAS, Inter-American Development Bank (IDB) and World Bank with a goal to facili- tate public-private dialogue.14 Both the World Bank and IDB have focused considerable research effort on this issue, releasing a series of technical rec- ommendations in the past decade on how Central America can move towards a more cost effective and sustainable energy matrix. Most recently, at the 2014 North American Leaders Summit President Obama, President Peña Nieto and Prime Minister Harper called for a meeting of their respective en- ergy ministers to discuss engagement with Central America and how North American countries can potentially supply this market.15 The obstacles to achieving such a transition are not technical, but rather political and financial. These include: 1. Regional disputes: Central American and Ca- ribbean governments have been slow to create a regional market, despite the creation of some regional infrastructure, particularly SIEPAC in Central America. Ongoing disputes over border issues, security, and migration among some states in the region impede regional co- operation. However, there is also a mismatch between the preferred option for new power Changing EnErgy DynamiCs in thE WEstErn hEmisphErE Latin amEriCa initiativE, ForEign poLiCy at Brookings 3PDF Image | ElectraTherm Enters Canada’s Natural Gas Compression Market
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