Latin America is amidst a renewable energy revolution. The influx in investment has changed the energy landscape from Mexico’s northern border to the southernmost tip of South America, supplying the grid with ever-increasing sources of energía renovable.
According to a 2016 report by the International Renewable Energy Agency: since 2004, renewable energy investment in Latin America has grown 11-fold—almost double the worldwide investment increase. Chile, Mexico, and Brazil are now among the top 10 renewable energy markets in the world.Electric grids are evolving rapidly, disrupted by regulatory changes, distributed generation, renewable portfolio standards, and evolving technology. Energy storage is uniquely positioned at the heart of all of this change. Download Greensmith Energy's White Paper to learn more about improving economics and demystifying energy storage systems.
Experts agree that energy security and increased demand have been significant drivers. Diversification has become a priority in countries currently dependent on fossil fuels and facing both fluctuations in pricing and the vulnerability of hydropower generation due to changes in climate. Electricity demand has also grown, largely as a result of economic growth. These shifts have offered Latin American countries the opportunity to rethink their generation profiles and incorporate diverse power sources.
The latest Ernst & Young Renewable Energy Country Attractiveness Index (RECAI) lists eight Latin American nations among the 40 countries studied. While China, India, and the US hold the top three positions, Chile (6), Mexico (9), Argentina (12), and Brazil (15) are among the top 20.
The RECAI report also underscores the fact that the current US administration is not as supportive of new energy technologies as the previous one. It specifically cites the President’s executive orders to eliminate climate change policies, revive the US coal industry, and review the US Clean Power Plan as detrimental to the US’s renewable investment attractiveness.
Beyond demand increases, Latin America’s receptive political climate and supportive policies have also played a role in the region’s increased interest in renewable power generation.
“Mexico offers good weather conditions and abundant renewable resources. Generally, people understand the need for green energy, and we believe Mexico is well positioned to take a leading role in the planning and administration of renewable energy projects,” said Jorge Moreno, Director of Technological Development at LiCore AC, a Mexican non-profit dedicated to the research and development of new electronic systems. Mexico’s intention is to rely on clean energy for 35% of its electricity demand by 2024, up from about 21% today. And by 2050, Mexico hopes to have a grid that runs on at least 50% clean energy.
Chile’s projections are even more ambitious: the country is currently on track to utilize clean generation sources for 90% of its electricity needs by 2050, up from the current 45%, according to the New York Times. Chile has awarded dozens of contracts to local and foreign companies in a large auction that outsourced about 23% of its expected energy needs over the next decade.
What are your thoughts? Is the surge in renewable power generation in Latin America a trend that you have observed? Do you predict that renewable energy companies will see an uptick in international deployments?