South America’s Energy Transition Poised to Benefit Business and Society

IRENA’s Regional Outlook highlights vast opportunities for economic growth, innovation, and energy security across the region but calls for significant investment

Abu Dhabi, UAE / Belém, Brazil, November 10, 2025 – South America’s shift towards renewable energy can unlock new opportunities and drive sustained progress, according to the new Regional Energy Transition Outlook South America released by the International Renewable Energy Agency (IRENA) at the United Nations Climate Conference COP30 in Belém, Brazil.

At present, the region does not attract sufficient investment for the energy transition, receiving USD 58 billion in 2024, which represents only 2.5% of the global total of USD 2.4 trillion. To achieve its energy transition goals, South America needs to ramp up investment in projects and expenditure in goods for end-use applications to an average of USD 500 billion per year through 2050.

Accelerating the energy transition would bring net economic and societal benefits that substantially outweigh the upfront costs. IRENA’s decarbonisation pathway shows that the region could increase its GDP growth by an additional 1.1% per year over the period 2023 to 2050 compared to current plans, while creating more than 12 million jobs in the energy sector.

Francesco La Camera, Director-General of IRENA stated: “By 2050, renewables could power nearly all of South America, but only with stronger grid connections and major investment to electrify homes, transport, and industry. The shift opens huge opportunities to build resilient local supply chains, boost manufacturing, and create high-quality jobs in renewables, grids, and clean technologies.”

Globally, a record 582 gigawatts (GW) of new renewable energy capacity was added in 2024, and for the first time, renewable energy investments surpassed those of fossil fuels. South America contributed strongly to this trend, adding 23 GW of renewable capacity and reinforcing its position as one of the most cost-competitive regions for renewable energy.

La Camera added: “As oil and gas jobs decline, new employment in clean energy will more than make up the difference. The transition also means less reliance on fossil fuels, stronger energy security, and healthier trade balances. South America’s energy transition isn’t just unstoppable, it’s a once-in-a-generation opportunity for business and society to drive green industrialisation and unlock growth.”

South America’s power sector is already undergoing a decisive shift toward renewable energy and has the potential to generate up to 98.5% of its electricity from renewables by 2050. Reaching this level requires adding up to 55 GW of renewable capacity each year, more than double today’s capacity additions pace, with solar and wind leading the expansion.

Furthermore, ensuring energy security in the region will require substantial investments in storage, back-up capacity and new grid infrastructure to manage variability and maintain reliability. Coordinated planning, investment in cross-border interconnections, and regional ancillary service markets can also play a significant role in reducing pressure on domestic systems and ensure the stability of supply.

To leverage the continent’s comparative advantages, IRENA proposes seven regional energy-focused actions, including enhanced grid interconnection, integrated electricity markets, supply chain strategies for solar and wind, coordinated development of green hydrogen and sustainable biofuels, and targeted strategies for industrialisation and energy efficiency.

The Regional Outlook evaluates the integration of renewable and low-carbon technologies into the energy system across 13 South American countries. It was developed in close collaboration with regional partners like the Inter-American Development Bank (IDB), the Latin American Energy Organization (OLADE), and the Economic Commission for Latin America and the Caribbean (ECLAC).

It provides guidance for policy makers in the region to support their national energy planning and the preparation of Nationally Determined Contributions, as well as inputs for local infrastructure and investment planning. It also offers the private sector insights for strategic planning and risk assessment.

Read Regional Energy Transition Outlook for South America: Executive summary