Argentina

Argentina

Seething market in Latin America

Whereas 2001 looked like being the year for Argentina to lead growth in Latin America's wind market, the spectacular collapse of its economy was on a par with the explosion of wind project permits in Brazil. Argentina's 100% devaluation, political instability, chronic debt and poor outlook will keep investment throughout the economy to an absolute minimum and 2002 will not see any significant advances in wind power. Spain's Gamesa has already scrapped all development plans, while the Spanish Endesa-Elecnor joint venture that promises to bring 3000 MW on-line over ten years did not even break the ice with the planned construction of 20 MW in 2001.

Brazil, meanwhile, looks set to finally build on its huge wind power potential. At the end of 2001 it granted authorisation for wind projects with a combined generating capacity of 3680 MW capacity, with a guaranteed power purchase scheme (Proeolica) to accompany the measure (Windpower Monthly, February 2002). Although recent rains have brought the end of Brazil's widespread power rationing -- in force since June 2001 -- the country is determined to diversify its generation by reducing its more than 90% hydro dependence. Wind is slated to be a big part of this. Delays could, however, be incurred by regulatory uncertainty for those projects authorised, but not yet included in the Proeolica scheme.

Mexico looks like being the only other potential wind heavyweight in the Latin American region. Like Brazil, its power sector has suffered from under investment in the past. With the continuing state control of the market, resources for future investment are insufficient to meet demand. President Vicente Fox pledges to increase public/private partnerships in generation projects, but an increasing number of states in the federal country are not convinced that the central government's power provisions will be sufficient. Keen to ensure local power supplies and generate additional employment, these states are promoting generation projects, including wind, in their areas while negotiating with federal authorities on ways around the complicated and bureaucratic regulatory field.

Studies and pilot projects continue in other regional countries such as Panama, Chile, Colombia, Jamaica and the Dominican Republic, but the post September 11 climate is especially hard felt in Latin America as investors retreat to more conventional markets and better known technology.

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