Global Information Inc. would like to present a new market research report, "Renewable Energy Market in South and Central America to 2020 - Clean Development Mechanism Projects and Climate Financing to Increase Renewables Share in the Energy Mix" by GBI Research.
Between 2012 and 2020, the cumulative renewable installed capacity for Mexico, Brazil, Argentina, Chile and Colombia is expected to grow at a Compound Annual Growth Rate (CAGR) of 14.1%, from 17.3 Gigawatts (GW) in 2011 to 56.6 GW in 2020. Favorable government policies, sizable untapped renewable power potential and increased emphasis on reducing dependence on fossil fuels are some of the major reasons for this expected growth.
Brazil is the major contributor to cumulative renewable installed capacity in South and Central America, followed, in order, by Mexico, Argentina, Chile and Colombia. Brazil was one of the first countries in South America to adopt renewable energy technologies and as a result it has the highest cumulative installed capacity of renewable energy. Moreover, it is the only country to have a complete value chain for biofuels and biomass. Mexico is set to become the first country in the region with a complete value chain for wind and solar.
Untapped Renewable Power Potential to Drive Growth in South American Countries
The South American countries analyzed in this report all possess rich renewable resources. Wind farms off the Brazilian coast and solar power in the desert of Chile are considered to be some of the best potential conditions for these technologies, globally. Mexico is considered the third-best country in the world for potential solar production, and also possesses substantial potential for wind power generation. The estimated potential for small hydro in Mexico is 3,250 Megawatts (MW). Rivers in Chile have shown potential through 290 channels and small dams for the generation of at least 850 MW. The Global Wind Energy Council estimates that there is 40 GW of wind potential in Chile. However, despite this sizable potential, South American countries account for a relatively small percentage of global renewable power generation, and there is substantial scope for renewable power to be developed in this region.
Strong Policy Framework Significantly Increasing Renewable Energy Industry Investments in Brazil, Argentina and Mexico
Strong policy measures are boosting renewable energy investments in Brazil, Argentina and Mexico. Brazil has made huge technological advancements in terms of renewable energy. The renewable energy sector in the country is strongly positioned for growth, which will be accelerated if the government pursues more ambitious and aggressive targets. In addition to this, various support schemes are provided by banks and financial institutions to promote renewable energy programs. Argentina and Mexico also offer huge potential for the growth of the renewable energy industry, and the government policies in these countries are also promoting renewable energy on a large scale.
Despite this stimulation, problems such as the absence of supply chains for clean energy goods have been encountered, and private investments in the region during the past year have been lower than expected. According to a recent Bloomberg report, the Latin America and Caribbean region, comprising Brazil, Mexico, Argentina, Chile and Colombia, accrued less than 5% of the $260 billion of global clean energy investments that were made in 2011. However, this is not expected to remain the case in the future, since changing global market conditions such as decreasing technology costs and overcapacity in industrialized countries will force manufacturers to look for new opportunities. This will aid the region in attracting investments for clean energy.
Government Policy Measures to Play Vital Role in Renewable Energy Development in South and Central America
Government policy structure and promotional measures for renewable energy play a vital role in renewable energy development in South and Central America. Mexico and Brazil have capital subsidy and rebate schemes for the further development of renewable energy. Different policy measures, such as renewable energy acts and financial subsidies have provided a boost for the renewable energy sector, and it is expected that these promotional measures will continue to drive growth in the industry. Brazils Empresa de Pesquisa Energetica (EPE), included in its National Energy Plan 2030, set a target of 7,800 MW of capacity for small hydro generation, to have been generated by 2030. Argentina aims to increase the share of renewable energy sources to 8% of national electricity consumption by 2016, while Chile aims to be generating 10% of its power from renewable sources by 2025.