This article excerpt is taken from the forthcoming issue of Renewable Energy Focus magazine (March/April issue). To register to receive a digital copy click here.
Latin America as a whole has held together well on the economic front despite the ripples of the global economic crisis.
Some states, for example, especially in the case of Brazil, are even excelling on a global scale and embracing renewable energy - not just as a source of energy for the grid - but as a way to continue to grow the economy.
According to Climatescope 2012, a ranking of Latin American countries’ renewable energy investment climate; public policy; and lending opportunities (compiled by the Inter-American Development Bank and Bloomberg New Energy Finance), the region sees around 7% of its 310GW of total capacity come from renewable sources. This comes from:
- Biomass and waste (10.4GW);
- Small hydro power (8.4GW);
- Wind power (2.4GW);
- Geothermal (1.5GW); and
- Solar (1.5GW).
But the potential, and more importantly the need, is much more than the figures would suggest. And the rising costs of conventional energy and falling prices for renewable equipment make Latin America an attractive option for companies looking to expand their project portfolio to new parts of the world.
In this article Renewable Energy Focus examines the leading developments throughout the region, and takes a geographical look at where the hot spots are for today’s projects and tomorrow’s investments.
Brazil hits right note with renewable energy
Brazil’s future looks bright, and in Latin America is the undisputed leader for renewable energy. It has a strong, growing economy that is diversifying and attracting investors from around the world. The 2014 World Cup and the 2016 Summer Olympics are all coming in the next few years – not to mention billions in infrastructure improvements and spending from visitors.
While the country still faces numerous challenges in spreading this growth and prosperity to the whole of the population, there is ample reason to be optimistic about Brazil’s future.
In terms of energy Brazil looks much different from the rest of Latin America due to the sheer quantity of consumption. In fact the country is the third largest energy consumer in the Western Hemisphere behind the U.S. and Canada, and 9th largest in the world, according to the US Energy Information Agency (EIA).
Much of the production in Brazil is still focused on oil, however, being the second largest oil producer (behind Venezuela), with production for 2012 expected to hit 2.8 billion barrels a day.
But despite its major role as an oil producing nation, interest in developing a greater share of renewable energy has long been on the radar of Brazil’s successive Governments, and in 2004 a long-term plan - and agency (PROINFA) - was formed, whose stated aim was to maximise the share of energy from renewable sources.
From 2004-2024 the agency plans the deployment of 144 production plants, which will bring some 3,299 MW of installed capacity onto the grid. This will include 1,191 MW from 63 small hydro projects, 1,423 MW from 54 wind farms, and 685 MW from 27 biomass plants, all which will be operated by Eletrobrás, Brazil’s largest electrical utility company.
The country’s status in terms of renewable energy is high even compared to European nations. According to Ernst & Young’s Country Attractiveness Indices, Brazil is tied with Sweden for the number 10 spot. And The Climatescope 2012 ranking came to the following conclusion:
“Compared with its peers Brazil has the most diverse set of clean energy policies with at least one incentive in place for nearly every one of the categories examined…”
Brazil’s Government is taking a lead role through auctions and financing, that both allow private companies to compete for the installation plants on a cost basis - independent of the technology.
Interest in finding renewable energy sources stems from energy problems experienced in the 1970’s after fuel prices shot upward. This created a political will to find new energy options, largely focusing on large scale hydro power projects, although lower rainfall and ecological issues surrounding these large projects has led to interest in other more sustainable sources as well.
For the rest of the article, subscribe to Renewable Energy Focus magazine - the March/April issue will be published in a few weeks.