Latin America and the Caribbean (LAC) began 2026 with a solid rebound in electricity production. During January, the region recorded generation of 171 TWh, representing a 9.6% increase compared to the previous month. This growth is explained mainly by greater availability of water resources, as hydrological restrictions eased across regional power systems, according to the latest Monthly Electricity Generation Report from the Latin American and Caribbean Energy Organization (OLACDE).
The technical report confirms that hydropower remains the backbone of regional supply, contributing 44.5% of the energy mix. This performance optimized the operation of the generation fleet, partially displacing higher-cost thermal plants and putting downward pressure on the system’s average marginal cost.
The strategic role of gas
At the same time, the fossil thermal fleet retained a significant share of 31.3% of the total. Within this segment, natural gas established itself as the dominant player with a 23.8% share regionally, confirming its role as the main flexible resource for load-following, operational backup, and the provision of ancillary services in environments with high penetration of variable clean energy.
OLACDE’s publication also highlights the seasonal vulnerability of renewable energy. In January, solar generation contracted 30%, geothermal 36%, and wind 11% compared to December 2025. For the organization’s analysts, this behavior underscores the urgency of having dispatchable technologies in the power system capable of precisely balancing grid intermittency.
On a year-on-year basis, the regional electricity market showed more moderate growth, up 1.2% compared to January 2025. The rebound was led by the hydropower segment, which contributed an additional 10.8 TWh, contrasting with the contraction in solar energy, which subtracted 11.2 TWh from the system.
Leadership in global sustainability
OLACDE’s assessment places LAC at the forefront of sustainability: the region’s renewability index closed the first month of the year at 66%, driven by 12 of its 27 member countries that managed to beat this average. Paraguay leads the list with a 100% clean energy mix, followed by Costa Rica (97.8%), Uruguay (96.5%), Ecuador (91.6%), Belize (90.9%), Colombia (88.7%), Brazil (88.5%), and Venezuela (87.7%).
January’s data reflect an energy model whose stability increasingly depends on the strategic coexistence of conventional hydropower, flexible backup from natural gas, and the deployment of non-conventional renewables. This synergy is key to ensuring energy security, climate resilience, and operational continuity throughout the energy transition process.
