July 2025
Energy Storage: A Fundamental Element in the Energy Transition of Latin America and the Caribbean

Latin America and the Caribbean are undergoing a rapid transformation of their electricity matrix, driven by the massive integration of non-conventional renewable sources, mainly wind and solar. These resources are abundant and competitive, offering extraordinary energy potential for the region; however, their variable and climate-dependent nature poses significant challenges to ensuring a stable and reliable supply.

In this context, energy storage emerges as a key tool to facilitate this energy transition. It not only serves as technical backup against the inherent fluctuations of renewable energies but also optimizes their use, enhances the resilience of the electrical system, and strengthens energy security.

Today, Latin America and the Caribbean have an installed capacity of approximately 2.5 GW; this includes 1.5 GW from BESS (Battery Energy Storage Systems) and 1 GW attributable to pumped hydro storage. BESS systems stand out for their modularity, operational flexibility, and rapid cost reduction. On the other hand, while pumped hydro is highly efficient, it faces limitations related to specific geographical requirements as well as high upfront costs.

Chile, Brazil, and Mexico, along with other countries in the region, are leading the adoption of these solutions thanks to policies and regulatory frameworks that create favorable conditions for their development; meanwhile, other countries in the region face regulatory and financial barriers that prevent greater penetration of this technology. To overcome these obstacles, it will be necessary to establish clear guidelines that strategically value the essential role of storage in power systems, as well as develop innovative financial mechanisms, strengthen local capacities, establish public-private partnerships, and promote distributed solutions and microgrids, especially in rural and island areas.

Given the diversity among regional electricity systems, it is essential to conduct technical and economic studies that accurately determine each country’s requirements on issues related to storage. Beyond its purely operational role, energy storage should be conceived as a fundamental pillar for a sustainable and secure transition, ensuring better use of the resources available in Latin America and the Caribbean; representing it as a crucial investment to consolidate a clean, stable, and sustainable future in the energy system.

 

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