Latin America: the new frontier of renewable energy

Latin America: the new frontier of renewable energy

Arianna Pescini
The nations of the developing world are producing more clean energy than the "global North." South America is leading the change and has enormous potential to implement it between now and 2030. We discuss the matter with Jorge Alberto Asturias Ozaeta, director of the Department of Studies of the Latin American Energy Organization (OLADE)

The global South is getting ready to go 100% green in the not too distant future. A case in point is Latin America, which is gearing up to create a new energy system over the next 15 years, one based on renewables as the most competitive energy solution, in terms of both costs and efficiency. Numerous studies have shown how developing countries have already caught up with and left behind the traditional industrial powerhouses in renewable investments and output. In 2015, according to Bloomberg Energy Finance, 58 states in the southern hemisphere have generated 70 GW of clean energy (the “global North” has produced just 59), with $154.1 billion in investments, primarily in wind and solar (in this sector investments grew from 11% in 2011 to 46% in 2015). In the most recent data, Central and South American nations shine, such as Chile, Mexico, Honduras and Uruguay, having managed to outperform regional giants like Brazil and Argentina in developing and promoting renewable energies. We discussed Latin America’s energy challenge with Jorge Alberto Asturias Ozaeta, director of the Department of Studies of the Latin American Energy Organization (OLADE), who stated, ''in 2015, Latin America and the Caribbean obtained 25% of their energy capacity from clean sources, while for the rest of the world the figure is 9%''. These numbers are corroborated by International Renewable Energy Agency (IRENA), which stressed how Brazil, Chile and Mexico are among the world’s top investors in carbon-free energy solutions.

Resources and goals

@OLADEORG: ''In 2015, #latam obtained 25% of energy capacity from #green sources; rest of the world 9%''.

The region’s potential is largely thanks to important natural resources: Patagonia for wind, the Atacama Desert for solar arrays, large rivers and their reservoirs for hydroelectric. This wealth is not available to all the many small states cradling the Caribbean, but it could help meet an electricity demand that will reach 1,813 TW by 2030. ''We must keep in mind the fact that some countries have not had this advantage'', said Asturias, ''as well as the environmental impact of climate change (for example, drought in Venezuela and Colombia has caused hydropower output to fall). That said, one solution is to promote energy integration in the region, a system which is already bearing fruit in Central America''. Among renewables, energy generated from the motion of water in particular is achieving important benchmarks: ''According to our data, in 2015, 23 Latin American countries had 677 GW of hydroelectric energy (only one fourth of which has been consumed), which now has a 47% share of the region’s total installed capacity. Some countries generate over 60% of their electricity with dams and run-of-the-river projects, for example Colombia, Costa Rica and Brazil''. For years Brazil has been a leader in hydroelectricity, which accounts for 63% of its energy output thanks to the endless kilometers of the Amazon’s waters. While hydropower has been made vulnerable by increasing drought conditions, in Central and South America solar, geothermal, biomass and especially wind are growing, with $15.5 billion in investments in 2015. Bloomberg New Energy Finance projects a 22.5 GW increase in capacity over the next five years. The alignment of conditions favorable to an energy transition is exemplified by legislation on the issue that helps prevent global warming while also driving costs inevitably down: ''Solar and wind are getting cheaper'', remarks Asturias, ''and every Latin American state, with the exception of Nicaragua, signed the Paris climate agreement, which translates into an expansion of renewables and greater energy efficiency, the same sustainable development goals promoted by the UN''.

58 states in the southern hemisphere generated 70 GW of clean energy (compared to 59 GW by ''global North'') with a $154.1 billion investment, mainly in wind and solar

The model nations

While Argentina is expecting to generate 20% of its energy from renewable sources by 2025 by adding 10,000 MW of capacity (mainly from wind), other countries are much further along than that. Mexico and Chile, for example: the latter plans to increase carbon-free energy by 58% by 2050, for 70% of the country’s total installed capacity. Successes are also happening in less developed economies like Honduras with its solar arrays and hydroelectricity in Peru and Paraguay thanks to the Itaipu dam. Costa Rica was already generating 47% of its energy needs from solar, wind and water in 2004. It will reach 100% within five years from now. Uruguay, on the other hand, has gone from being a coal country to one with the highest number of wind turbines per capita, now generating 1 GW. At the end of last year the country managed to produce 95% of its electricity from renewables. The combination of solar, wind, hydro and biomass is already 55% of the total available energy mix. Another fine example is that of Ecuador: ''2016 has been a year of change'', concluded the director of OLADE’s Department of Studies, ''with 90% of the country’s energy generated from clean sources. The credit goes to hydroelectric dams, which will save the country appr. $1300 million a year''.