South America Sets Historic Benchmark: Zero New Coal Plants Planned

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South America just achieved a remarkable energy milestone, quietly setting a global benchmark: for the first time in history, the entire continent now has zero new coal-fired power plants planned. To grasp how remarkable this is, we need only glance back a decade. When the Paris Agreement was signed in 2015, South America had eighteen coal-fired plants on the drawing board, reflecting global uncertainty about the role coal would play in powering emerging economies. Today, that uncertainty has vanished. Coal, once perceived as a staple of industrialization and economic stability, has essentially vanished from the continent’s energy future.

Historically, coal played a modest but still significant role in South America’s power mix. The continent’s grid has traditionally been powered predominantly by hydropower and natural gas, with coal concentrated in a handful of countries — most notably Chile, Colombia, and Brazil. Chile, in particular, relied heavily on coal for decades, with coal-fired generation peaking at over 40% of its electricity mix in 2016. Meanwhile, Colombia’s relationship with coal is deeply intertwined with its economy; though it remains one of the world’s largest coal exporters, domestically it has always used relatively little coal to generate electricity. Brazil, despite vast hydro resources, maintained a few coal plants primarily in the southern states where domestic coal mining supported local economies.

The decisive turning point for coal’s prospects in South America began around 2015, catalyzed in large part by the Paris Agreement. The international climate accord provided both a symbolic and practical impetus for nations to reconsider coal’s role. Climate commitments, coupled with rapid improvements in renewable technologies and plunging costs for wind and solar power, dramatically reshaped the energy landscape. By early 2025, every previously proposed coal plant had either been cancelled or shelved, reflecting a convergence of policy alignment, market economics, and public sentiment against coal.

Chile is perhaps the most instructive case study in this transition. In the last decade, Chile has transformed from a coal-heavy nation to a global leader in renewable energy. This rapid transformation came about through deliberate policy measures including aggressive carbon pricing, strict emission standards for coal plants, and a well-designed renewable energy auction system. The economic advantage of renewables quickly became apparent, as Chile’s Atacama Desert, one of the sunniest places on Earth, became host to massive solar projects providing electricity at record-low prices. By 2024, Chile’s reliance on coal had dropped dramatically, with coal now accounting for less than 20% of total electricity generation. Furthermore, Chile implemented innovative financial mechanisms to facilitate early retirement of coal plants, such as blended finance schemes supported by international lenders. These measures have proven highly effective, allowing coal plants to shut ahead of schedule, accelerating the nation’s transition to renewables.

Colombia’s experience illustrates another aspect of coal phase-out — the management of a “just transition.” With coal exports central to Colombia’s economy, the domestic political landscape posed significant challenges. Despite this complexity, Colombia joined the Powering Past Coal Alliance in 2021, sending a strong international signal that the era of coal power was ending. The government under President Gustavo Petro, elected in 2022, explicitly committed to winding down coal power and mining operations, albeit with careful attention to workers and communities dependent on coal-related employment. Plans are now in place to gradually retire Colombia’s few remaining coal power plants, with a particular focus on developing alternative economic activities such as renewable energy projects, agriculture, and eco-tourism to replace coal mining and related sectors. Colombia’s ongoing transition highlights the crucial importance of incorporating social and economic dimensions into the decarbonization process, ensuring no community is left behind.

Brazil’s journey away from coal reflects a somewhat contradictory policy environment. In 2022, Brazil controversially extended subsidies and operational guarantees for coal plants in Santa Catarina until 2040, citing regional economic considerations. However, even this move is effectively a holding pattern rather than a genuine expansion — no new coal capacity is planned or under serious consideration in Brazil. Meanwhile, renewable energy continues to flourish across the country. Brazil is a global leader in wind and solar energy growth, adding gigawatts of renewable capacity each year through highly competitive auctions. Market forces overwhelmingly favor renewables, and even with extended subsidies, Brazil’s coal plants struggle to compete economically. The likelihood remains high that coal generation in Brazil will diminish faster than official policy timelines suggest, driven by the relentless market pressure from cheaper and cleaner renewable alternatives.

The broader factors underpinning South America’s remarkable transition away from coal include robust economics, international climate commitments, effective environmental activism, and geopolitical shifts in energy finance. Renewable technologies, especially solar and wind, have plummeted in cost, making them unquestionably more competitive than coal across the continent. Simultaneously, international financial institutions, previously critical sources of coal plant financing, have largely withdrawn from coal projects. China’s decision in 2021 to cease funding overseas coal power was particularly impactful, as several planned South American coal projects relied on Chinese financing.

The environmental and social benefits of eliminating coal are substantial and becoming increasingly evident. Communities previously burdened by coal plant pollution, suffering from elevated rates of respiratory and cardiovascular diseases, now experience tangible health improvements. Reducing coal use dramatically cuts air pollutants such as sulfur dioxide, nitrogen oxides, and particulate matter, significantly improving public health outcomes in affected regions. Ecologically, phasing out coal also means alleviating local water stress and pollution from coal-ash storage facilities, contributing positively to broader environmental restoration efforts in historically coal-intensive areas.

Nevertheless, South America’s successful coal phase-out is not without ongoing challenges. Grid reliability remains a paramount concern as coal plants retire. Renewable energy’s intermittent nature requires new approaches to ensure continuous, reliable power supply. In response, countries are investing in expanded transmission infrastructure, energy storage systems, demand management programs, and smarter grids to effectively integrate higher shares of variable renewable generation. Furthermore, the socioeconomic transition in coal-dependent regions remains critical. Well-designed policies must ensure a genuinely just transition, with retraining, economic diversification, and community support essential to avoid social dislocation and economic hardship.

While South America has impressively eliminated plans for new coal power, caution remains warranted as the region substantially invests in natural gas infrastructure, potentially creating another long-term fossil dependency. As of early 2025, roughly 100 active gas-fired projects are either under construction or in development across Latin America. For instance, Bolivia recently inaugurated a 103 MW gas-fired plant at its Mutún Steel Complex, constructed by Chinese firm CRRC Ziyang, signaling continued reliance on gas for industrial power. In Brazil, Mitsubishi Power is supplying gas turbines for the 1.6 GW UTE Portocem thermoelectric plant, expected online by 2026. Guyana, too, is developing a major 300 MW gas-to-energy facility near Georgetown, funded through a substantial $526 million loan from the U.S. Export-Import Bank. While these natural gas projects are underway, the scale of renewable energy development far surpasses that of natural gas in Latin America.

Globally, South America’s quiet exit from coal provides a powerful example for other regions still grappling with their own fossil fuel dependence. Developed nations can learn from South America’s cost-effective renewable auctions, innovative financing mechanisms, and socially conscious transition strategies. Developing countries, particularly in Asia and Africa, may find inspiration and practical guidance in South America’s path, proving that economic growth and poverty alleviation do not have to depend on coal.

Looking forward, South America’s future energy landscape appears overwhelmingly renewable, driven by further investments in wind, solar, and storage solutions. The region is on track to become one of the first globally to fully eliminate coal from electricity production, an achievement that positions South America as a leader in sustainable development. With COP30 scheduled to take place in Brazil in 2025, the continent’s coal-free ambitions will be on display, demonstrating to the international community what rapid, responsible energy transition can look like.

Ultimately, South America’s elimination of planned coal plants represents a historic turning point, offering hope and a model for the world. It underscores the potential for emerging economies to leapfrog outdated, polluting technologies and directly adopt cleaner, more sustainable alternatives. The global energy transition is complex, but South America’s recent milestone shows that a coal-free future is not only possible, but already taking shape.