CS25: Energy Transition

South America's energy systems face rising variability from renewables, heterogeneous demand profiles across countries, and persistent underutilization of gas pipelines and power transmission assets. This paper frames regional energy exchanges as "virtual energy storage" (VES): the ability to shift energy across time and space by coordinating electricity transfers with gas-system flexibility (including linepack proxies and gas-to-power switching) using existing infrastructure. We develop an energy-economics valuation framework to quantify the welfare and system-cost impacts of VES across Argentina, Bolivia, northern Chile, and Brazil, and to identify the market-design conditions required to support higher regional liquidity in natural gas and electricity.
We address three questions: (i) what is the economic value of VES under plausible scenarios for fuel prices, renewable curtailment, and seasonal demand heterogeneity; (ii) how much unrealized value is constrained by physical bottlenecks versus institutional frictions (tariffs, access rules, balancing and nomination regimes); and (iii) which implementable instruments can unlock value with minimal new CAPEX. Methodologically, we combine a simplified coupled gas–power network model with scenario-based dispatch and transfer simulations to estimate changes in total system cost, curtailed energy, and reliability indicators. We then apply an institutional feasibility layer that scores corridors and exchange products based on compatibility of tariff principles, capacity allocation mechanisms, and operational coordination requirements.
Expected results show that treating demand heterogeneity and gas–power flexibility as an economic asset can reduce curtailment and total costs, strengthen security of supply, and improve the investment case for renewables, supporting the energy transition through integration rather than expansion-first st

Achieving the Paris Agreement's 1.5°C warming limit requires a fundamental transformation of global energy systems, a goal that is both ambitious and complex. Success depends on the deployment of vast amounts of renewable energy, rapid electrification across transport and industry, and the scaling of emerging technologies. Yet challenges persist: renewable technologies like solar PV and wind cannot follow demand signals; their deployment requires substantial land, materials, and network investment; system costs of firming and grid integration can be significant; and success depends on supportive policy frameworks and regulation. Against this backdrop, countries vary significantly in their structural readiness to navigate the transition effectively.
This paper proposes a framework for assessing country-level capacity to decarbonise based on existing energy infrastructure, policy frameworks, and resource endowments. The framework identifies three critical dimensions determining transition readiness: (i) energy supply mix, particularly the share of electricity in final energy consumption and dependence on coal and oil; (ii) pricing and regulatory environment, including cost-reflective tariffs and enabling climate and renewable energy policy; and (iii) clean energy resources and supporting infrastructure, encompassing economically viable renewable potential, access to flexibility resources such as gas, grid infrastructure capable of integrating variable renewables, and the ability to import clean energy.
We applied the framework to a diverse set of countries, illustrating how structural readiness shapes transition pathways and identifies priority reform areas. Countries like Chile emerge as well-positioned "winners", with abundant renewable energy resources, dispatchable gas, and relatively strong energy and climate policies, while India faces greater challenges - relatively low endowment of renewables, high dependence on coal and oil, and subsidised tariffs. Many countries occupy a "messy middle" with mixed performance across dimensions. The framework provides policymakers and investors with a systematic tool for assessing transition risk, prioritising capacity-building efforts, and designing context-appropriate decarbonisation strategies.

Research Question: How can international trade and cross-regional value chain integration be structured to accelerate the global energy transition while reducing systemic costs and strengthening energy security?
The global energy transition is often analyzed at the level of domestic industrial plants. This plant-centered perspective, however, can yield incomplete or misleading conclusions. Energy-intensive goods-such as steel, aluminum, fertilizers, and hydrogen-based products-are embedded in complex global value chains (GVCs). Their carbon intensity, cost structure, and security implications depend on the geographic configuration of upstream and downstream activities across regions, not on isolated facilities.
This paper argues that decarbonization can be significantly accelerated through trade-enabled geographic optimization of value chains. Building on the concepts of Green Comparative Advantage and powershoring, it proposes a framework in which renewable-rich regions specialize in the most electricity-intensive stages of production, while advanced economies focus on higher value-added manufacturing, engineering, and technological segments. Such North–South and South–South integration generates measurable global carbon arbitrage by leveraging disparities in embedded emissions across jurisdictions.
Many South American countries are well positioned within this cooperative architecture. With high shares of renewable electricity, competitive solar and wind resources, and strategic mineral endowments, economies such as Brazil, Chile, Paraguay, and Uruguay can serve as low-carbon anchors in transcontinental value chains. Rather than exporting raw materials, they can industrialize renewable advantages and embed clean energy in tradable goods.
In this context, the EU–Mercosur agreement could unlock deeper collaboration by reducing trade barriers, harmonizing standards, and strengthening regulatory cooperation. Shifting the analytical focus from plants to interconnected value chains reveals that structured interregional integration is central to achieving a cost-efficient, secure, and globally coordinated energy transition.

This article argues that energy transitions can be understood as historical development windows, not mere linear technological substitution questions. We forward the hypothesis that such processes are opportunities for industrial upgrading, but also new flanks for external coercion. Nations that discipline their development strategies to mobilize State capacity, elite coalitions and industrial policy catch-up, or even leapfrog. The less successful risk a commodity trap. We use comparative historical analysis to contrast the development trajectories of Brazil and Japan over 1850–1950 to induct insights relevant to current debates on sustainable industrialization. To expand the analysis as not purely historical, we employ evidence on industrial output, energy systems and exports, and examine the mechanisms linking external coercion, change in institutional and elite coalitions, energy policy and economic complexity. In Japan, direct foreign coercion led to the Meiji Restoration, whose reforms reorganized the former warrior classes into bureaucratic and industrial functions, and created a centralized State dedicated to a strong economy, energy modernization and military readiness. Brazil, in contrast, more indirect external coercion in the form of constraints in trade, finance and technology - combined with weaker nation-building and underdeveloped human capital - led to a sluggish modernization and preserved the extractive coalition. Only after 1930 Brazil had its "Meiji moment", affording delayed industrialization and limited energy development. This comparison provides a framework to analyze problems associated with the contemporary green transition, as it may create new forms of external coercion via carbon regulations and new industrial vanguards in advanced nations. Without coordinated industrial and energy strategies, Brazil, and other commodity-exporters, risk stagnating into a "green" commodity trap - importing green complex technologies whose inputs they export. With this approach to energy transitions, we hope to contribute to the energy economics literature with lessons from economic history, development theory, and political economy. 

In the transition towards low carbon energy systems, decision makers demand robust analytical tools capable of addressing the multidimensional complexity inherent in renewable energy planning. Experience shows that project viability assessments focused mainly on technical and economic feasibility often overlook social acceptance, environmental constraints, and territorial dynamics that ultimately determine whether a project becomes operational and sustainable over time. As a result, many renewable energy projects experience delays, higher costs, or failure due to community opposition, licensing barriers, or inadequate spatial planning. Consequently, integrated evaluation frameworks are increasingly needed to account for the multiple dimensions that shape the real-world performance of energy projects. This study develops a multicriteria decision analysis (MCDM) framework to support decision-making in the evaluation of onshore wind energy projects. Unlike most existing approaches, which tend to emphasize technical and environmental factors while only partially addressing financial and social considerations, the proposed framework encompasses five dimensions within a single coherent structure: technical, economic, social, environmental, and geospatial, integrated with Geographic Information Systems (GIS). The model was parameterized and applied in Colombia, an emerging economy whose power system relies heavily on hydropower and has low penetration of non-conventional renewable energy sources, while national targets promote the development of renewable energy, including onshore wind power. Results demonstrate the framework's ability to rank candidate zones according to their comprehensive wind generation potential, confirming that integrated multidimensional assessment substantially reduces the risk of overestimating site suitability compared to fragmented evaluation approaches. The proposed framework constitutes a replicable and scalable decision-support tool for investors, planners, and policymakers involved in energy transition strategies.