Facing the imminent gas deficit that will directly impact electricity generation, it is urgent to prioritize planned development to ensure supply, says the expert.
ISSUE 147 | 2025
Vesna Marinkovic U.
1Bolivia, as a country traditionally known for its hydrocarbon production and significant infrastructure in that field, is it in a position to pursue an “integral and radical” transition toward renewables without suffering losses in the process?
Our country is in the early stages of its energy transition. Although renewable energy projects have been developed, progress has been slow, and the electricity matrix still depends largely on thermal power plants. As Fundación Milenio points out, “The Energy Transition is not an option it is a necessity.” Given the imminent gas deficit that will directly affect electricity generation, it is urgent to prioritize planned development that ensures energy supply. In the short term, we must promote a rapid expansion of renewable energies such as solar, wind, and small hydropower plants to reduce gas consumption. Considering the country’s economic situation, private sector participation in this first stage is key to speeding up implementation and ensuring energy security.
“…this plan does not account for the potential natural gas shortage announced by YPFB beginning in 2028, making it urgent to review and validate its projections in light of this imminent risk.”
2The replacement of fossil resources with various sustainable and renewable energy sources, which undoubtedly point toward cleaner and more sustainable generation, would such a radical shift be envisioned for the short and medium term in Bolivia?
The energy transition aims to replace non-renewable resources with renewables through comprehensive, long-term planning for the entire economy. In the short term, it is urgent to accelerate this process in the electricity sector due to the looming gas shortage. To achieve this, investments in solar, wind, biomass, and small hydropower must be facilitated. Moreover, it is essential to maximize the capacity of existing hydroelectric plants and complete the ongoing Ivirizu and Miguillas projects (501 MW in total), which would cover 29% of current demand. In the medium term, the transition will rely on the planned development of new hydroelectric power plants.
3The integration of energy with information technologies smart grids capable of coordinating energy flows and optimizing transport systems with a focus on public mobility does this imply completely eliminating vehicles powered by gas, gasoline, and diesel?
The combination of information technologies and smart grids is akin to giving the electrical system a “brain.” Such a system can perfectly coordinate when energy is generated (from sun and wind) and when it is consumed either for normal loads or secondary uses during surplus production. It can also manage demand based on assigned priorities, such as ensuring supply to essential services like public transport.
Regarding the complete elimination of vehicles powered by gas, gasoline, and diesel, there has been a shift in the targets initially set by major countries. The current goal is no longer their immediate elimination but rather a gradual and now slower phase-out over time.
4What would be the estimated economic cost of this transition under a short- and medium-term government plan? Would this involve new infrastructure, among other investments?
According to the “Optimal Expansion Plan of the National Interconnected System (SIN) with Renewable Energies 2024–2050,” planned investments up to 2032 amount to US$ 1.332 billion to incorporate 900 MW of solar power and 293 MW of wind power. This expansion also requires an additional US$ 635 million in transmission network investments, bringing the total to US$ 1.967 billion.
It is crucial to note that this plan does not account for the potential natural gas shortage announced by YPFB starting in 2028, which makes it urgent to review and validate these projections in light of this imminent risk.
5The energy transition is closely linked to energy storage systems such as lithium batteries, which still depend on fossil fuels like diesel for their production. Is this dependency temporary?
The manufacturing of Battery Energy Storage Systems (BESS) currently depends on fossil fuels; however, this impact is being rapidly mitigated. The integration of renewable energy in battery manufacturing plants, the development of new battery chemistries that are less resource- and material-intensive, and large-scale recycling are drastically reducing the carbon footprint across the entire lifecycle of storage systems.
The ultimate goal is for BESS to become a fully sustainable energy solution with no fossil fuel dependency.
6What would the modification of urban and rural spaces imply in order to optimize the use of energy from renewable sources? Would it mean the emergence of a new kind of economy and society?
The growing transition toward a decentralized energy model is already transforming societies from passive consumers into active producer-managers. This shift naturally affects both the economy and the social fabric, redefining a dual role that of the “prosumer,” who produces, consumes, and even trades energy.
The social impact manifests through a more collaborative citizenry and a reconfiguration of both urban and rural spaces. Cities will need to integrate distributed generation and smart grids, while rural areas will optimize land use to make solar and wind farms compatible with agricultural and livestock activities.
In Bolivia’s case, this transition would have a twofold impact: on one hand, it would reduce costs and expand the supply of fuels; on the other, it would help address the recurring diesel shortages caused by current supply and subsidy policies that put pressure on the domestic market.
7What role should the Bolivian State play, and what incentives would be necessary to promote the production and use of synthetic diesel within the framework of the energy transition?
The Bolivian State should take on a facilitating role by creating a legal and regulatory framework that enables the implementation of synthetic diesel production technologies. This means enacting clear, transparent, and stable regulations that open the market to private investment and provide legal certainty for new ventures.
Key incentives would include a favorable tax framework that encourages the establishment of plants and lowers initial investment costs; facilitated import of waste materials, which serve as low-cost feedstock for synthetic diesel production; and innovation support policies to attract companies and technological developers to the country.
In this way, Bolivia could open an alternative energy market with significant benefits in employment, technology transfer, industrial development, and the generation of cleaner, more sustainable energy.
8Finally, why Paraguay and not Bolivia for your synthetic diesel production?
Because Paraguay provides a natural legal framework anyone can market fuel there. In contrast, Bolivia is a bureaucratic and regulatory nightmare that hinders entrepreneurship and only benefits those in central government, while innovators and producers are left at the mercy of their strategies.
“Bolivia is a bureaucratic and regulatory hell that hinders entrepreneurship and only benefits those in government…”
