Renewable Energy and Regional Integration Drive Latin American Vision for Growth – Modern Diplomacy

With its abundance of natural resources and emergence from many recent pandemic constraints, some Latin American nations are bullish about the region’s potential to become a global leader in providing clean energy. Regional specificities, such as the abundance of hydropower and solar energy, convey unique advantages – particularly if the Americas achieve greater electrical grid connectivity.
President Gustavo Francisco Petro Urrego of Colombia, speaking at a session on Leadership for Latin America at the 53rd World Economic Forum Annual Meeting, called for the region to “build an American electricity grid from Patagonia to Alaska”. Such connectivity would allow renewable energy producers in Latin America to sell power to the United States and Canada.
“We can make our continent the centre of clean energy production,” agreed Fernando Haddad, Minister of Finance of Brazil. He echoed the vast opportunities for Latin America to attract foreign investment and promote entrepreneurship through renewable energy. “All this will depend on regional integration,” he added. Better coordination among Latin American nations would facilitate trade, integrate financial markets and improve infrastructural connections in energy, transport and other sectors.
Access to global markets is central to many nations’ vision of prosperity in Latin America. Rodrigo Chaves Robles, President of Costa Rica, said: “Costa Rica has done very well by including itself in supply chains.” Costa Rica has actively promoted industries such as medical supplies, aerospace and back-office services. The nation’s leadership sees both bilateral and multilateral trade agreements as necessary for the ongoing growth of such sectors.
In the Dominican Republic, small- and medium-sized business represent the core of the economy. “SMEs are 70% of our productive base,” said Raquel Peña, Vice-President of the Dominican Republic. Reforms have focused on improving opportunities for SMEs such as facilitating loans to entrepreneurs and developing tax-free zones.
Achieving growth requires managing diverse national needs. In Ecuador, the new government focused on reducing corruption as a key to economic growth. “Fighting corruption and keeping public spending under tabs frees resources to invest in social affairs,” said Guillermo Lasso Mendoza, President of Ecuador.
An ongoing challenge in Colombia is tackling violence related to drug trade. “Colombia has lived for decades in violence. We used to call it perpetual violence,” said President Petro. He suggested that new agricultural opportunities could help stabilize violence-prone, cocaine-producing regions. One idea involves converting cocaine production to cocoa production, with the help of multinational corporations such as Nestlé. Moreover, nations around the world can help reduce violence by promoting decriminalization of some drugs and increasing prevention efforts focused on drug education.
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Off the coast of Portugal, a team of underwater robots is scanning the base of turbines on a wind farm and looking for signs of damage while aerial drones check the blades. The activity is part of a project to reduce inspection costs, keep wind turbines running for longer and, ultimately, reduce the price of electricity.
Wind power accounted for more than a third of the electricity generated from renewable sources in the EU in 2020 and offshore wind energy is expected to make a growing contribution over the coming years. Denmark became home of the world’s first offshore wind farm in 1991 and Europe is a global leader in the field.
Still, running wind farms in seas and oceans is expensive and adds to the overall cost of such clean power. Furthermore, Asian companies in the sector are gaining ground, increasing the European industry’s need to retain a competitive edge.
Lower costs
‘Up to 30% of all operation costs are related to inspection and maintenance,’ said João Marques of the INESC TEC research association in Portugal.
Much of this comes from sending maintenance crews out in boats to examine and repair offshore-wind infrastructure.
The EU-funded ATLANTIS project is exploring how robots can help on this front. The ultimate goal is to cut the cost of wind energy.
Underwater machines, vehicles that travel on the water surface and aerial drones are just some of the robots being tested. They use a combination of technologies – such as visual and non-visual imaging – and sonar to inspect the infrastructure. Infrared imaging, for instance, can identify cracks in turbine blades.
Research carried out by the project suggests that robotics-based technologies could increase the amount of time that maintenance vessels can work on wind farms by around 35%.
Higher safety
Expense is not the only consideration.
‘We also have some safety concerns,’ said Marques, who is a senior researcher on the ATLANTIS project.
Having people transfer from boat to turbine platforms, dive beneath the waves to inspect anchor points and scale turbine towers is dangerous.
It is safe for people to transfer from boats to turbine platforms only when waves are less than 1.5 metres high. By contrast, robotic inspection and maintenance systems can be deployed from boats in seas with waves of up to 2 metres.
In addition, easier and safer maintenance will increase the amount of time that wind farms can be fully operational. In winter, it is often impossible to carry out offshore inspection and maintenance, which must wait for better weather in spring or summer.
‘If you have a problem on a wind farm or on a particular turbine in a month where you cannot access it, it needs to be stopped until someone can reach it,’ said Marques.
Being able to work in higher waves means that causes of wind-farm shutdowns can be tackled more quickly.
First of its kind
The project’s test site is based on a real offshore wind farm in the Atlantic Ocean, 20 kilometres from the northern Portuguese city of Viana do Castelo. It is the first of its kind in Europe.
‘We need somewhere to actually test these things – somewhere where people can actually develop their own robotics,’ Marques said.
In addition to its own robotic technologies, ATLANTIS aims to help other research teams and companies develop their own such systems.
European researchers and businesses active in this cutting-edge sector should be able to book time to use the facilities starting early this year.
Damage prevention
Another way to cut maintenance costs is reducing damage and the need for repairs in the first place. The recently concluded EU-funded FarmConners project sought to do just that through the widespread use of a technology called wind farm control, or WFC.
When hit by wind, a turbine extracts energy from the air flow. As a result, the flow behind the turbine has a reduced energy, a phenomenon known as shadowing. Because of this uneven distribution of energetic load on blades and towers, some turbines get damaged more than others.
WFC aims to balance out the distribution of wind energy throughout the farm, according to project co-coordinator Tuhfe Göçmen of the Technical University of Denmark.
There are several ways to mitigate the effects of shadowing. One is to misalign turbines. Instead of facing straight into the wind, a turbine can be turned slightly so that the shadow effect is steered away from turbines behind.
The pitch and the rotational speed of the turbine’s three blades can also be changed. While this cuts the amount of energy the turbine produces, it leaves more for the turbines behind to harvest.
As well as reducing wear and tear and maintenance costs, WFC can make wind farms more productive and help them generate power in a way that is easier for the electricity grid to handle.
Renewable energy including wind power is often produced in peaks and troughs. Sometimes the peaks, or surges in power, can overload the electricity grid.
With the turbines working together, power production can be levelled out to provide more consistent and stable input to the grid, according to Göçmen.
‘If we control turbines collectively, it is simply more efficient,’ he said.
Research has shown that such wind-farm control could increase the power output of all wind farms in the EU by 1%.
That’s equivalent to twice the output of a 400 megawatt wind farm, which would cost around €1.2 billon to build, according to Gregor Giebel, a FarmConners co-coordinator also at the Technical University of Denmark.
This technology is also simple to implement as most wind turbines can be controlled and adjusted to act in the ways needed by WFC. The wind farms need simply to update their control software.
There is a lot of commercial interest in WFC technology, making it a promising way for Europe to expand its use of wind energy, according to Göçmen,
It is ‘low-cost and potentially high-gain,’ he said.
Research in this article was funded by the EU. This article was originally published in Horizon, the EU Research and Innovation Magazine.
Recent economic signals have given experts reasons for hope, if not complacency about the outlook for 2023. Signs of declining inflation, resilient consumer spending and strong labour markets, among others, suggest that growth could be rebounding in the short term.
“My message is that it is less bad than we feared a couple of months ago, but that doesn’t quite get to us to being good,” said Kristalina Georgieva, Managing Director of the International Monetary Fund.
The threat of rising inflation seems to have abated in many parts of the world, thanks in part to interest rate increases from some central banks. While many decision-makers have expressed determination to sustain rates, there is a risk that recent improvements could cause leaders to ease rates.
“The greatest tragedy in this moment would be if central banks were to lurch away from a focus on assuring price stability prematurely and we were to have to fight this battle twice,” said Lawrence H. Summers, Professor at Harvard Kennedy School of Government.
A major economic priority worldwide for 2023 involves accelerating decarbonization. Recent legislation in the United States to support green energy will provide billions of dollars in funding but has provoked concerns of launching a subsidy war between Europe and the US over decarbonization technology. On the one hand, competition to promote green energy could accelerate progress for the benefit of all. On the other hand, the risks that nations will block technological developments and turn inward would deter global progress.
“I hope very much that this subsidy race we are hearing about is not going to be a race for the bottom,” said Christine Lagarde, President of the European Central Bank. A negative repercussion of Europe-US competition would be overlooking the imperative to finance the green energy transformation in the developing world, which is the most vulnerable to the impacts of the climate crisis.
Competition over green energy could amplify other risks of fragmentation in global trade as many nations prioritize national security over global integration. “Over the last three years, we have entered a new era of globalization. We have shifted from market-driven globalization to politically powered globalization,” said Bruno Le Maire, France’s Minister of Economy, Finance and Industrial and Digital Sovereignty.
Fragmentation poses numerous risks to the world economy, such as higher costs associated with reorganizing supply chains. For example, Europe and the US have focused recently on increasing domestic production of silicon chips. There is a risk that such turning inward will impede global cooperation on trade and climate goals.
The easing of pandemic restrictions in China raises questions for the 2023 economic outlook. One potential concern involves rising energy costs worldwide, as Chinese consumption rises.
In Japan, inflation remains a concern, but the nation has seen recent improvements in job creation. “We made that change I should say mainly due to increased labour participation of women,” said Kuroda Haruhiko, Governor of the Bank of Japan.
In terms of the most pressing risks for 2023, economic experts focused on the ongoing war in Ukraine not only as a geopolitical and humanitarian crisis but also as a concern for economies around the world. Likewise, experts expressed uncertainty about whether inflation would continue a downward trajectory and about the continued threat of mutations of COVID-19. Despite recent signs of improvement, “relief must not become complacency,” Summers noted.
Amid the climate, energy and geopolitical crises that have been raging for some years now, it is time the world looked to Africa for energy, Samia Suluhu Hassan, President of Tanzania, said at a session on “Repowering the World” at the 53rd World Economic Forum Annual Meeting.
“We have everything when we talk about green energy – cobalt, copper, nickel… You can extract and manufacture in Africa, provide energy to Africa and take it to other countries.”
Making an appeal for greater private sector investment in Tanzania, Hassan said Africa needs a lot of energy as many Fourth Industrial Revolution technologies are being applied there and a lot of related manufacturing is carried out there. “We want to build regional power pools in East African and Southern African… if any region has a shortage, the other could supply it,” she said. Instead of Europe, Japan or India pursuing unilateral policies, more concerted efforts are needed to tackle the energy crisis that is truly global in nature, she added.
Chemistry is the mother of all industries, said Ilham Kadri, CEO and Chairman of the Executive Committee, Solvay, and it is imperative to create diversified supply chains of metals and rare earths such as lithium, cobalt, nickel and copper that are essential components of EV batteries and so many other applications in the energy transition.
China has built rare earths value chains for decades and to avoid a “Russian gas supply syndrome”, she said Europe and countries around the world must find diversified sources of these metals and minerals as well as localize battery assembly.
From reskilling workers to issuing permits, Europe needs policies that “get it done quicker”, Kadri said, when asked about the United States’ new Inflation Reduction Act (IRA) that offers funding and incentives to accelerate the clean energy transition and has raised fears in Europe of an investment drain. Europe must boost its competitiveness to prevent de-industrialization, she said. “The question is not IRA or not, but what does it take for Europe to have a competitive industrial policy? I need clean energy, at cost and at scale, and 365 days a year.”
In the same vein, Mark Rutte, Prime Minister of the Netherlands, said the IRA is an opportunity for Europe to cut bureaucratic red tape, which would unleash opportunities for innovation, new jobs and working together at a European scale, or else “real action will move to Asia and other parts of the world”.
Asked if Europe had been amiss in continuing to depend on cheap Russian gas for too long, Rutte agreed that Europe could have cut this dependence sooner, but added that it was a collective failure, and not just Germany’s, as it is sometimes made out to be. Natural gas will continue to be used as a transition fuel in the short- to medium term, he said, but longer term, the direction is decidedly towards renewables, green hydrogen and even nuclear.
“I would not be amazed if many more countries start to reinvest in nuclear,” he said, adding that Belgium will build two new nuclear reactions.
The Technology Perspective Report of the IRA got a thumbs-up from Francesco Starace, CEO and General Manager of Enel, for not only interpreting the need to transform energy systems but also to transform supply chains and industrial systems. “China and some Asian countries took the chance [to do so] earlier,” he said. The energy transition is taking place much faster than originally estimated, and will accelerate, he said, adding that this puts additional pressure on an industry used to longer time horizons.
The US has significantly increased its gas production to supply the EU, said Joe Manchin III, Senator from West Virginia (D). “Our friends and allies were hurting,” he said, referring to Russia’s curtailment of supplies to the EU, “And we couldn’t come to your rescue fast enough.” He added that the US would continue to ramp up gas production but would do it more cleanly than ever while simultaneously investing in carbon capture, methane capture, renewables, storage, and so on. “We will not get rid of something until we have [an alternative] that works at least as well,” he said.
Taking a more measured stance towards fossil fuels, Keir Starmer, Leader of the Opposition of the UK, said his Labour Party supports the use of oil and gas during the energy transition but is against any new investments in fields in the North Sea or elsewhere. “We have a strict target for 2030 for green power,” he said, referring to Labour’s target of 60% renewables in the energy mix by 2030.
Starmer said the British Prime Minister’s absence in Davos was in line with a general failure to grow the economy. “Britain has not had a strategic plan for 10 years, foreign direct investment in the UK is down to 4%,” he said, adding that it is essential to restore trust in institutions and match public investment with private to unlock the UK’s potential.
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