Latin America and the Caribbean (LAC) began 2026 with a strong rebound in its electricity production. In January, the region generated 171 TWh, representing a 9.6% increase compared to the previous month. This growth is mainly attributed to greater water resource availability due to the easing of hydrological restrictions in 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 hydroelectricity remains the backbone of the regional energy supply, contributing 44.5% of the mix. This performance optimized the operation of the generation fleet, partially displacing the more expensive thermal power plants and putting downward pressure on the average marginal cost of the system.
The strategic role of gas
Meanwhile, fossil fuel-based thermal power plants maintained a significant share of 31.3% of the total. Within this segment, natural gas consolidated its position as the dominant player with a 23.8% share regionally, reaffirming its role as the primary flexible resource for follow-on load, operational backup, and the provision of ancillary services in environments with high penetration of variable clean energy sources.
The OLACDE publication also highlights the seasonal vulnerability of renewable energy. In January, solar generation contracted by 30%, geothermal by 36%, and wind by 11% compared to December 2025. According to the organization's analysts, this trend underscores the urgent need for manageable technologies in the electricity system that can accurately balance grid intermittency.
In the year-on-year comparison, the regional electricity market showed a more moderate advance, with an increase of 1.2% compared to January 2025. The rebound was led by the hydroelectric sector, which contributed an additional 10.8 TWh, contrasting with the contraction of solar energy, which registered a drop by subtracting 11.2 TWh from the system.
Leadership in global sustainability
The OLACDE report places Latin America and the Caribbean at the forefront of sustainability: the regional renewable energy index closed the first month of the year at 66%, driven by 12 of its 27 member countries that surpassed 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%).
The data for January reflect an energy model whose stability increasingly depends on the strategic coexistence of conventional hydropower, flexible natural gas backup, and the deployment of non-conventional renewables. This synergy is key to guaranteeing energy security, climate resilience, and operational continuity during this energy transition.