From Fossil Fuels to Low Carbon Energy Transition: New Regulatory Trends in Latin America (Energy, Climate and the Environment)

Focusing on five key themes - hydrocarbons, electricity, mining, social license to operate, and arbitration/dispute resolution- via in-depth country and regional case studies, this book seeks to capture the contrasting and sometimes conflicting trends in energy governance in Latin America as it wrestles with a dependence on fossil fuels whilst shifting toward a low carbon future. Energy transition continues to sit at the centre of the Latin American policy debate as the world continues to push for carbon neutrality by 2050. Latin America is undergoing a renewable energy transition, with substantial reserves (solar, wind, hydro, geothermal) and many countries in the region setting ambitious renewable energy policies, laws, and regulations to address climate change. However, recent initiatives to promote renewables must be placed in context. Historically, Latin America has developed and improved its economic and social standards due primarily to an economy based on the extractive industries and fossil fuels. This places renewables at the crossroads of multiple drivers, as the region seek to ensure security of supply, attract investment, and facilitate a low carbon energy transition. Acknowledgements Contents Editors and Contributors About the Editors Contributors Abbreviations Note on Units List of Figures List of Tables Part I Introduction 1 Latin America: Renewables at the Crossroads of Multiple Drivers 1.1 Introduction 1.2 From Mexico to Tierra del Fuego: Latin America 1.3 At the Crossroads: Moving Forward? 1.4 Outline of the Book 2 Transformation of Energy Law in Latin America: Towards a Sustainable, Unified and Global Energy Law 2.1 Introduction 2.2 Disperse and Autarchic Energy Law: Pre-2010 2.3 Sustainable, Unified and Global Energy Law: Post-2010 2.3.1 Shared Principles 2.3.2 Shared Regulatory Cycle 2.3.3 Interdisciplinary 2.3.4 Convergent Energy Governance 2.3.5 Global Energy Law 2.4 Conclusions Part II Hydrocarbons, Electricity and Mining 3 The Peruvian Renewable Energy Experiment: Lessons for Policymakers 3.1 Introduction 3.2 The Legislation and Its Results 3.2.1 Context for the Incentive Programme Enactment 3.2.2 The Main Features of the Legislation 3.2.3 The Bidding Results 3.3 Effects on the Power Market 3.3.1 The Relevant Commercialization Rules 3.3.2 The Intrinsic Problem of the RER Levies 3.3.3 The Market Response 3.3.4 The Future of the Market 3.4 The Future for RER Legislation in Peru 3.4.1 Making the Same Policymaking Mistake 3.4.2 Does a Market-Approached Mechanism Rightly Incentivize New RER Capacity? 3.5 Conclusions 4 Searching for Security of Energy Supply Through Renewable Energy Sources: A Practical Overview of the Chilean Case 4.1 Introduction 4.2 Historical Domestic Facts: Chile 4.2.1 Domestic Overview 4.2.2 Energy Availability 4.2.3 Arrival of Non-Conventional Renewable Energy Regulation in Chile 4.3 Non-Conventional Renewable Energy Development in Chile 4.4 Projections 4.4.1 Energy Needs Projections in the Mining Industry 4.4.2 Green Hydrogen 4.4.3 Industrial Water Consumption 4.4.4 Electromobility 4.5 Conclusion 5 Venezuela: Petroleum Industry and Regulation 5.1 Introduction 5.2 Evolution of Hydrocarbon Regulation in Venezuela Until 1998: Summary of the Main Aspects 5.3 Excessive Regulatory Activity of the State Over the Hydrocarbons in Venezuela During the last Two Decades: A General Overview 5.4 General Comments on the Venezuelan Petroleum History and the Excessive Regulation by the Venezuelan State Over Its Hydrocarbons Industry 5.5 Final Reflections References 6 The Mexican Energy Transition 6.1 Introduction 6.2 The Expropriation of the Oil and Gas Industry 6.3 The Mexican Hydrocarbon Sector and the Energy Transition 6.3.1 Brief Overview Among the Most Relevant Reforms 6.3.1.1 1938 to 2014 6.3.2 Energy Reform 2014 6.4 The Hydrocarbon Sector and the Energy Transition 6.5 PEMEX Business Plan 6.6 Legal Framework for the Energy Transition 6.7 Conclusions 7 Energy Transition in Argentina: Past, Present and Future 7.1 Argentina’s Standing on the Energy Transition 7.1.1 The Global Agenda Impacts Argentine Energy Policy 7.1.2 Argentine Energy Mix: Past, Present and Future 7.2 Scattered but Steady Efforts to Diversify the Energy Matrix 7.2.1 Renewables: Wind and Solar Power 7.2.2 Hydrogen 7.2.3 Lithium 7.3 The Need for Comprehensive Policymaking 8 The Important Role of Mining Within the Energy Transition: The Case of the Lithium Sector in Argentina 8.1 Introduction 8.2 Lithium in Context 8.2.1 Lithium Demand 8.2.2 Lithium Sources 8.3 The Lithium Industry in the Lithium Triangle 8.4 Lithium in Argentina 8.4.1 Argentinean Constitutional Organization 8.4.2 Lithium Regulation: General Mining Legal Framework 8.4.3 Lithium History in Argentina 8.5 Specific Regulation for Lithium? 8.6 The Argentine Lithium Region 8.7 Argentinean Electromobility Initiative 8.8 Conclusion 9 Energy Transition in the Peruvian Mining Sector: Regulatory Approach or Just Private Self-Regulation? 9.1 Introduction 9.2 The Mining Industry and the Energy Transition Regulatory Framework in Peru 9.2.1 The Mining Sector in Peru 9.2.2 Mineral Policy in Peru 9.2.3 Regulatory Mining Framework 9.2.4 Energy Transition Framework 9.3 Energy Transition in the Mining Industry 9.4 Conclusions Part III Social License to Operate and Dispute Resolution Mechanisms 10 Social Licensing to Operate and Social Justice in Energy Transition: The Case of Brazil 10.1 Introduction 10.2 The Brazilian Energy Sector 10.2.1 Background 10.2.2 Social License to Operate (SLO) 10.2.3 Socio-Environmental Context 10.2.4 Challenges 10.3 Social Justice in the Brazilian Energy Sector 10.3.1 Socio-Environmental Protection and Mitigation Measures 10.3.2 Public Consultations in Accordance with Brazilian Law 10.4 Final Considerations 11 Social License to Operate: A Review of the Colombian Case 11.1 Introduction 11.2 Colombia and the Social License to Operate 11.3 Colombia’s Lands Restitution Public Policy and the Relationship with the Concept of Social License to Operate 11.4 Prior Consultation 11.5 Conclusions 12 Peruvian Regulations for Renewable Energy Resources: An Analysis of the Regime Based on Arbitration Awards 12.1 Introduction 12.2 RER Regime 12.2.1 What is the RER Regime? 12.2.2 How Does the RER Regime Work? 12.3 Critical Aspects of the RER Regime 12.3.1 National Interest and Public Necessity 12.3.2 Timely Supply of Electricity 12.3.3 The Attraction of Foreign Investors (by Long-Term Supply Contracts and Guaranteed Rates) 12.4 Analysis of Arbitration Cases Derived from RER Regime Projects 12.4.1 Santa Lorenza S.A.C. (“Santa Lorenza”) Against Minem 12.4.2 Electro Zana S.A.C. (“Electro Zana”) Against Minem 12.4.3 Empresa Generacion Hidraulica Selva Sociedad Anonima (“Egehissa”) Against Minem 12.4.4 Empresa De Generacion Electrica Colca S.A. (“Egecolca”) Against Minem 12.4.5 Recurrent Issues on the Analysed Arbitration Cases 12.4.6 Proposed Measures to Decrease Litigation Related to RER Supply Contracts 12.5 Conclusions 13 Energy Transition in Latin American Countries and the Conflicts Associated with Such Transitions 13.1 The Approach to Energy Transition in Latin America 13.2 Timeline for Transition 13.3 Conflict Arising from the Energy Transition 13.4 Conclusions Part IV Epilogue 14 Epilogue: Changing Latin America Through the Energy Transformation? 14.1 Energy Transformation in a Pandemic Context 14.2 Energy and Mineral Riches, Between Affluence and Dependence 14.3 Funding the Energy Transition, Private Investment, and the Role of the State 14.4 Energy Justice and the Social Impact of Renewable Energy 14.5 Concluding Words: Energy Transformation as the Promotor of Regional Change Index