Costa Rica

Costa Rica

Latin America - Southern trio prepares to tap into big wind potential

LATIN AMERICA: As Brazil leads, it seems to pull its southern neighbours along, as almost all wind-power associations and consulting services have identified the region as one with great potential to speed up the construction of wind projects in 2013, despite political and macroeconomic uncertainties.

Google Translate

Although Argentina, Chile and Uruguay currently only have 385.5MW of installed capacity between them, they have recently implemented regulations and programmes which will be renewables start to take off.


Uruguay is by far the most ambitious country in the region as its 2030 energy plan aims to end its dependence on expensive fossil fuels. The country aims to source 100% of its electricity from renewable sources by 2030, with 30% coming from wind. This year it is expected to meet its mid-way target of 450-500MW of wind installed two years early, due to improving regulatory and investment conditions set by the government.

Uruguay ended 2012 with 44MW of installed capacity across four wind farms. Although the amount remains static from 2011, the year was spent concluding contract signings, seeking financing and buying equipment. According to Ramon Mendez, the energy director at the energy ministry, $100 million was invested in wind power throughout the country in the past 12 months.

The energy plan has been in place since 2006, when state-controlled power company UTE launched tender rounds to buy renewable power. UTE has so far signed 945MW in contracts with developers in four different tenders. The first tender in 2010 saw contracts signed for 150MW in 22 projects. More than 900MW was offered, which persuaded the government to run further tenders.

However, progress may be slowed by low prices of $63/MWh achieved at the last auction in 2011 and a lack of transmission network.


While Argentina's wind market is still stagnant, this year could see progress with at least 790MW under construction in several regions.

Since 2010, when the government auctioned and signed contracts for 754MW in wind projects at a fixed price of $127/MWh - the highest in the region - little has been developed. Last year, only 26.5MW came online.

Just 50MW of the 200MW Loma Blanca IV, located in southern province of Chubut is expected to come online by December, while the 50MW Mapaspina I, also in Chubut, which is at an advanced stage, may start operations next year, according to an official of the Argentine Wind Power Association.

The problem is finance. Argentina carries investors' scepticism about macro and political stability. Despite harbouring the southern cone's only two large turbine manufacturers - Impsa and NGR Patagonia - business is slow as investors wait for more guarantees.

Argentina's government could take advantage of low prices in neighbouring Brazil and Uruguay to tap new investments, suggests Carlos St James, president of the Latin American and Caribbean Council on Renewable Energy. "In the current situation, no bank will finance projects in Argentina, but with a few changes to protect investments, the market could boom," he says.

A 2006 law gave Argentina a target of supplying 8% of its total consumption from renewables by 2016. This represents around 2.5GW, of which initially 500MW would come from wind.


Neighbouring Chile has a large pipeline under consideration, but the renewables sector is facing a watering down of support from the centre-right government of Sebastian Pinera, which wants to reduce its renewables target and remove financial support.

Although Chile added only 17MW to its installed capacity in 2012, taking it to 205MW, it held two tenders to lease public land for renewables. It is taking advantage of the mining sector's need to reduce emissions and the number of projects under construction has soared.

Chilean renewables association Acera has estimated that 450MW will start operations this year. Chile has an impressive pipeline of 3.25GW of projects that have been approved and a further 2.72GW are being analysed by federal environmental agency SEIA.

Free-market champion Pinera has been proposing significant changes to the country's energy plan, which aims to boost renewables to 20% of capacity by 2020. The government considers the target unfeasible.

In January, the government proposed replacing the land-leasing contracts system, which includes subsidies, with competitive auctions as in Brazil and Uruguay, where the lowest prices win. This has been met with resistance from renewable energy developers.

Other Latin American countries

Honduras is due to start construction this year on three wind projects totalling over 120MW. Power purchase agreements were signed with state-owned utility ENEE in January. Two projects are new wind farms, the third is a 24MW extension to its existing 102MW Cerro de Hula plant, the country's first wind plant, online since 2011.

Peru's wind capacity remains at 1MW, however, in October Vestas won a contract with ContourGlobal for its first project in the country. The location is currently unknown. Peru held its first renewable energy auction last year. The government selected three wind power projects totalling 142MW which must be operational by 2013.

Other countries with wind include Costa Rica (132MW), Caribbean (91MW), Nicaragua (73MW), Dominican Republic (33MW), Guadeloupe (27MW), Colombia (20MW), Cuba (12MW), Ecuador (2MW), Falkland Islands (2MW) and Martinique (1MW).

Latin America capacity pie

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in