A new report from MAKE Consulting predicts new installed wind power capacity to set records in 2015 and 2016, following an already impressive 2014, reaching 4.8 GW and 5.4 GW respectively.
Not only is the Latin America region as a whole expected to set new installation records, but Mexico, Uruguay, Panama, and the Dominican Republic are all expected to set new capacity installation records in 2015 as well.
Unfortunately, MAKE Consulting predicts that demand for new wind capacity is expected to drop between 2017 and 2020, “primarily due to economic risk in Brazil,” before levels recover in 2021.
The news comes following a successful 2014 across the board for Latin America’s renewable energy industry, setting records and stepping up in the global scheme.
In September, then-NPD Solarbuzz released figures which predicted Latin America and the Caribbean would install 9 GW of solar PV over the next five years.
“Solar PV is now starting to emerge as a preferred energy technology for Latin American and Caribbean countries,” said Michael Barker, senior analyst at NPD Solarbuzz. “The region has high electricity prices and it also benefits from strong solar irradiation, which makes it a good candidate for solar PV deployment. As a result, experienced global solar PV developers are seeing strong solar PV growth potential in the region.”
Conversely, many of the factors that make solar PV a good candidate for the regions also give wind energy a boost — such as high electricity prices. On top of that, MAKE Consulting highlights wind energy’s synergy with hydroelectricity, Latin America’s most prevalent generation technology. Furthermore, prolonged drought across several countries in Latin America, such as Brazil and Panama, is highlighting “the importance of diversifying renewable generation portfolios with wind power.”
Beyond the practical applications of wind energy (and other renewable energy technologies), renewable energy could also address significant economic, social, and environmental challenges, according to a report published by the Worldwatch Institute in December of last year. The report, Study on the Development of the Renewable Energy Market in Latin America and the Caribbean, identified renewable energy growth opportunities and barriers, as well as providing specific methods to overcoming any challenges identified.
“Our goal was to prepare a concise and comprehensive report on the current status of, and powerful drivers for, renewable energy in the LAC region,” said Alexander Ochs, Worldwatch’s Director of Climate and Energy and the project leader, who went on to add that one of the conclusions from the report was the value renewable energy can provide in the region to combat the high vulnerability to extreme weather events.
It is these extreme weather events, however, which will cause the market to slump between 2017 and 2020, due primarily to “a faltering economy and an extended power market crisis caused by prolonged drought” in Brazil. MAKE expects Brazil to connect nearly 23 GW worth of new wind capacity through 2024, which will account for approximately 43% of the region’s capacity installations across that timeframe. That’s not bad, considering that in 2014, Brazil accounted for 66% of the 3.75 GW worth of new wind capacity installed in 2014.
On the other side of the renewable energy fence, GTM Research released figures earlier this year which showed that the Latin America solar market grew by 370% in 2014, installing a total of 625 MW — and while that figure may not sound impressive when compared to other nations, that figure is expected to jump over 2 GW in 2015, bringing the region’s cumulative installed solar PV capacity nearly to 3 GW in only a few years.
But it is wind energy that MAKE Consulting believes will be the big winner in 2015.
Mexico is expected to see accelerated development in 2016 after the conclusion of the country’s electricity market reform, which began in 2013. In fact, Mexico is looking to meet its relatively ambitious 35% worth of non fossil fuel generation by 2024, leading MAKE to predict PPA signing activity to increase. In all, MAKE is predicting Mexico to install over 1 GW in 2016.
And though Brazil’s expected slump will deal a heavy blow to overall installation figures in 2017, MAKE is expecting to see this juxtaposed somewhat by an increase in capacity additions in 2018 in Columbia, Peru, and Argentina. In fact, according to MAKE, “sustained geographic diversification of new wind power installations and demand acceleration within larger markets” are expected to fuel six years of consecutive growth in Latin America between 2019 and 2024.
Despite impending problems in the region’s main growth country, Latin America should see a healthy expansion of the wind industry over the next decade, no doubt followed by a concomitant growth in solar PV.