Brazil and Chile will lead the way for growth in the renewable energy industry throughout South America through 2017, says GlobalData.
A number of analysts across the globe have highlighted the rise in focus on renewable energy development in South America. This has mostly been seen to be borne out by the numerous and repeated renewable energy project development announcements that have peppered the news over the first half of 2015. Both countries have drawn interest from some of the planet’s most prosperous renewable energy developers, looking to make inroads into a new market, while benefiting countries that need renewable energy the most.
GlobalData, in a report published recently, predicted that Brazil is set to spearhead renewable energy additions in South America through 2017. The research and consulting firm forecasts South America’s largest country’s cumulative renewable energy is set to expand from 19.8 GW in 2013 to over 32.9 GW by the end of 2017.
Following in Brazil’s footsteps, GlobalData also predicts that Chile will see the fastest increase in renewable development over the forecast period, with its cumulative installed capacity rising from only 1.06 GW in 2013 to 5.37 GW installed by the end of 2017.
Countries throughout South America are looking for ways to integrate renewable energy into their mix, led by Brazil, said Ankit Mathur, GlobalData’s Practice Head for Power.
“Brazil is looking to increase power generation from renewable energy sources and is aiming for 10% of its annual generation to come from these sources by 2020,” Mathur said. “In order to achieve this target, the Brazilian government introduced the Program of Incentives for Alternative Electricity Sources (Programa de Incentivo a Fontes Alternativas de Energia Elétrica; PROINFA) in 2002 to boost renewable energy adoption.
“The first phase awarded auctions for 3.3 GW of wind, biomass and small and medium-sized hydropower plants in 2004. PROINFA was succeeded by auction procedures in 2011, to encourage further development of the power generation sector.”
Interestingly, it is biomass that currently leads the way in Brazil’s renewable energy mix, with 50.1% of the share in 2014. However, GlobalData believes that that will change by the end of 2017, with wind power capacity expected to exceed biomass, with 41.4% by the end of 2017, up from only 27.3% in 2014.
Similarly, according to Mathur, Chile is set to make the most of its bounty of renewable energy resources, with significant potential in solar, wind, and geothermal.
“Wind accounted for the largest share of 39.9% in 2014, followed by biomass with 22.2% and solar with 19.2%. With 16 new solar photovoltaic projects planned in Chile this year alone, solar power capacity is expected to become the new leader with 47.6% in 2017, as wind power slips to second with a 34.7% share.”
A report from MAKE Consulting, also from May, similarly predicted big moves by Brazil’s wind industry through 2017 — though, at which point, Brazil’s contribution will slump, “primarily due to economic risk,” before recovering in 2021 to continue a strong development path.
MAKE expects Brazil to connect nearly 23 GW worth of new wind capacity through 2024, accounting for approximately 43% of the region’s capacity installations across that timeframe. However, “a faltering economy and an extended power market crisis caused by prolonged drought” in Brazil will cause the country’s involvement to slump between 2017 and 2020.
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