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Wind powers across Latin America

LATIN AMERICA: Blessed with rich wind resources, Latin America is the rising star of the global wind industry. Last year, the region doubled its installed wind-power capacity, with more than 1.2GW coming online.

The growing economies of both Mexico and Brazil herald a growing need for energy. Latin America has a broad political commitment to environmental protection, and the international spotlight being shone on Mexico and Brazil through the hosting of global environmental and financial events (COP16, G20, Rio+2012), not to mention upcoming sporting events (football World Cup in 2014 and the 2016 Olympics), must play some role in a desire to boost their green credentials. This can only be good news for businesses looking south for new opportunities as markets in the US and Europe falter.

In 2011, half of the region's installed capacity came from Brazil. And after adding nearly 1GW in the past 12 months, supported by a growing local supply chain and local service providers, Brazil is about to hit the 2GW milestone, according to the country's wind energy association. With the end of the government's Proinfa scheme of power purchase agreements, wind-energy investment is driven by competitive auctions. With these and low global prices of wind turbines, wind power is now the second cheapest source of energy in Brazil after large hydropower.

But continued development needs a new regulatory framework, legal security for project development and a support system to enhance competitiveness. A lack of grid infrastructure is causing delays for some projects, particularly in the north-east of the country, where 50% of installed capacity is located. Despite a healthy pipeline of projects, Brazil currently has no long term energy policy that outlines a path for wind power's growth or ensures grid connectivity.

Mexico is finally harnessing its great wind-power potential and this year is set to install over 500MW. The 230MW capacity that has come online so far this year is part of Oaxaca's first "open season" tender, under which developers commit to renting grid space. Another 2GW is expected in 2016 following the second open season, which is currently being discussed.

High output

Mexico's major task is to increase development in many of its windy states, where over half of the proposed 20GW of projects are expected to achieve a high 35% output of the turbines' rated capacity. The national energy strategy document for 2012-26 supports this with policy and regulatory recommendations to reach the country's target of 35% non-fossil fuel generation by 2024.

In other markets in Latin America, private-sector developments are taking place. Across Chile, Honduras, Costa Rica, Panama and some of the Andean markets, such as Peru, 120MW is under construction. Uruguay, with a clear renewable-energy policy, is another bright spot, but competitive wind-power prices will be needed to continue growth there. Further investments in Uruguay, Argentina and Chile might be spurred on by a regional electricity-integration initiative recently undertaken between Brazil and Uruguay.

Ramon Fiestas chairs the Latin America Committee at the Global Wind Energy Council.

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