A clear illustration of the two steps forward and one step backward progress in the region was seen in October, when Latin American and Caribbean governments grandly signed an agreement setting a regional goal of 10% of power from renewable sources by 2010. But environmental groups immediately dismissed the agreement for failing to require individual countries to make any specific commitments. "In practical terms this means they have permission to step backwards, given that, for example, Brazil considers that 41% of its energy matrix is renewable," says Taller Ecologista, a non-government organisation based in Rosario, Argentina. Under these terms, Brazil's existing renewables generation alone is enough to cover the regional 10% goal, according to the environmental groups.
Brazil has the largest government-sponsored program for promoting wind power in the region. But Proinfa, which will set contract prices for renewable power purchases under government tenders, once again failed to get off the ground in 2003 as the stagnant electric power sector continued to debate a new regulatory model to replace the failed attempts at liberalisation. These ended with nine months of power rationing in 2001 and 2002. New laws for strong government intervention are moving through Congress, but will only become fully effective in 2005.
Meantime, the government has pressed on with regulating Proinfa, as the renewable power law of 2002 requires contracts to be signed by April. Although the definitive prices for power have not been published, federal utility Eletrobrás is preparing tenders for 3300 MW split evenly among wind, biomass and small-scale hydro. Preliminary prices were somewhere between $60/MWh and $100/MWh, depending on location and -- controversially -- capacity factors (Windpower Monthly, October 2003).
At first sight this is an optimistic timetable, but the tenders will to a certain extent be a formality. Eletrobrás is planning to award contracts on a first-licensed, first-served basis -- and given that the electric power regulator, Aneel, has already authorised more than 130 projects and 7200 MW of capacity, with most having already secured environmental licenses, the allocation will not be hard to fill.
All the usual suspects are present in the wings, including Spain's Gamesa, Elecnor and Guascor, and France's Siif Energies. Wobben Windpower of Germany, affiliated with Enercon, is the first to have set up wind turbine production in Brazil. Meanwhile, the national development bank, BNDES, is reported to be planning a special line of credit for Proinfa projects.
Colombia & Mexico
The largest Latin American wind plant to get underway in 2003 was not in Brazil but in Colombia. The $27.8 million, 19.5 MW Jepirachi station of German Nordex turbines started turning in Colombia's Guajira department in December. It is owned by local utility Empresas Publicas de Medellín (EPM). The project is backed by the World Bank's Prototype Carbon Fund (PCF), which will pay around $2.8 million for substituting 800,000 tonnes of carbon generated by thermal-power over 15 years.
In Mexico, political suspicion over the involvement of the private sector in strategic parts of the economy considered to be unalienable sovereign assets and a clear emphasis on oil production rather than electricity, means wind projects have made little progress. Wind plant developers have had some success exploiting a loophole which allows independents to supply large private sector customers and in gaining access to the transmission grid of state power company Comisión Federal de Electricidad (CFE).
After ten years of talk, Mexican wind power company Fuerza Eólica plans to start work on the first 51 MW of its 150 MW, $60 million wind project in southern Mexico's Oaxaca state later this year, according to project director Pablo Gottfried. Fuerza Eólica, a 50/50 joint venture between US Clipper Windpower and the Gottfried family, with close links to GE Wind, will sell power to Mexican cement maker Cruz Azul under a power purchase agreement (PPA) under negotiation.
Another project in Oaxaca is the $80 million wind plant to be built by Mexican engineering company Deproe and Siif Energies. CFE and the energy regulator have approved the project, which will initially provide 290 GWh a year to four Mexican cities. Although the project has an ultimate capacity of 180 MW, it will start with 67.5 MW, adding more power as more cities sign up.
In Equador, relatively high power prices of about $0.14/KWh make it attractive for wind power investments, but continuing political uncertainties in the Andean nation mean that very little has made it off the drawing board. Nevertheless, the department council in Loja, in the south of the country, is wrapping up $17 million in financing for a 14.5 MW wind plant in Villonaco. An 18 month feasibility study carried out with the backing of the Catalan Energy Institute and Spanish consulting firm Normawind identified five sites with wind speeds of 12 m/s, says project manager Jose Aguirre. He adds that total installed capacity could be as much as 110 MW.
Any significant progress for wind in Latin America depends on economic growth. Some green shoots are visible in the wreckage of recent years. Argentina is making a return to pre-crisis levels and the giant economies of Brazil and Mexico are expected to grow by 3% or 4% this year. The launch of Proinfa will be a significant boost for wind power in the region, but it still seems that other large scale initiatives will not get underway in 2004.