Policy Series;No. 5

Reliable and affordable energy services are essential to the modern world. Secure access to these services and the stability of their prices are key concerns for policymakers worldwide. For countries that are predominantly dependant on imported fossil fuels for their electricity generation, there are many associated long term risks in this regard, including the potential economic disruptions due to petroleum prices volatility, the vulnerability of fuel shipping and storage systems to terrorism and climate change impacts (i.e. increased strength and propensity of hurricanes), and negative environmental impacts associated with fuel combustion. However, there exist viable alternatives to the current patterns of fossil fuel consumption. Modern renewable energy technologies have seen dramatic decreases in costs, coupled with increased efficiency and reliability over the past two decades. Abundant renewable resources, including solar, wind, geothermal, biomass, and hydro may be found throughout Latin America and the Caribbean offering many countries of the region the possibility to utilize domestic natural resources for the production of clean electricity. In fact, renewable energy technologies can help meet the surging growth in electric power demand - both on and off-grid - throughout the region. Additionally, when coupled with the implementation of energy efficiency improvements significant reductions in fossil fuel use for power generation can be achieved