Two reports on Latin American countries show the region has a bright future ahead with policies supporting renewable energy in place and investments that continue to increase.
According to the Economic Commission for Latin America and the Caribbean, significant policy changes in South American countries will help develop their renewable energy industries.
Separately, clean energy data provider Bloomberg New Energy Finance said political stability in the region, increased energy demands as a result of economic growth and a desire to be energy independent will all add up to attract green investments.
The commission said Argentina, Brazil, Chile and Colombia are now the top countries that implemented laws favoring green energy development and the establishment of targets based on their own renewable portfolio standards.
Other Latin American countries have also begun implementing indirect subsidies and tax credits to support renewable energy, the commission said.
Camila Ramos, Bloomberg New Energy Finance’s regional research head, said they are seeing “unprecedented commitment” to the green energy sector in the form of state-run auctions for new power generation and other state mandates.
“Those should result in higher investment levels in coming years,» Ms. Ramos said.
Ms. Ramos said there remains a fundamental undersupply of electricity capacity that needs to be met despite the slowdown of the region’s economies during the recession. Most South American countries want to become less reliant on foreign oil and natural gas from Venezuela, Bolivia or elsewhere, she said.
It is estimated that countries in the region would require an investment of $572 billion in the electricity sector between 2007 and 2030 to meet the energy demand.
Status
Bloomberg reported that investments in renewable energy have surged from only $2.9 billion in 2005 to $18.1 billion in 2008. The region saw a decline in 2009 to $16 billion due to the recession, but is now geared for recovery.
This year also promises to witness record-breaking investment in the wind and biofuels sectors, Bloomberg said. In the first quarter, the market researcher said it saw the strongest ever green energy investment rates in the region for these industries.
Biofuels is the largest green energy subsector in South America, with Brazil’s and Argentina’s industries in place and nascent industries present in Colombia and Peru.
Bloomberg reported that in 2009, 736 megawatts of wind installations were added in the region, while cumulative capacity reached 1.4 gigawatts. The report projects cumulative capacity in Argentina, Brazil and Chile alone to reach almost 8 GW by 2015.
Other industries like hydro and biomass are also in the upswing. Biomass will benefit from the abundant land and resources of the region, the report says.
Since the development of large-scale hydro face opposition from certain groups, as in the case of the Madeira Hydroelectric Complex near the Amazon, small hydro is predicted to get more attention.
