Venezuela's solar energy market is expected to grow at a CAGR of more than 1.5% during the forecast period. The impact of COVID-19 is expected to delay the proposed solar projects in the country, as the whole supply chain is affected from 2020. The primary drivers of the market include rising energy demand and efforts to reduce the reliance on fossil fuel-based power generation. Other factors like increasing demand for renewable energy, available potential in solar energy sources are driving the solar energy market. But as of 2020, even with an ideal solar radiation level (5.1 kW x m2) to install photovoltaic energy production systems at a large scale, the country is lagging to uplift the solar PV projects. This is primarily due to the increasing reliance on alternate clean power sources such as hydropower and wind, and also the expensive nature of solar energy and pirated services in the country, which in turn, is likely to restrain the growth of the solar energy market in the coming years.
- The government's plans to increase the share of renewable energy in the country's energy mix are expected to drive the solar energy market during the forecast period.
- The Venezuela Plan for the National Electric System aims to integrate renewables in the power system by including them in medium and long-term strategies. It aims to develop the use of renewables within isolated rural communities includes solar. The future development of the solar energy sector in Venezuela with the growth of energy consumption and substitution of fossil fuels by renewable energy potential is likely to promote the solar energy market in Venezuela. Moreover, efforts to decrease the emission of greenhouse gases is also expected to provide opportunities for growth in the coming future.
Key Market Trends
Plans to Increase Renewable Energy Share in the Energy Mix to Drive the Market
- Venezuela is in its transition stage towards a new energy stage in which renewable energy is expected to become the fundamental resource to address the country on its path to sustainability. According to the latest statistics published by the International Renewable Energy Agency, Venezuela had around 5.32 MW of installed solar PV power generation capacity in 2019.
- In 2019, the Venezuelan government announced a plan to build its first utility-scale PV project to strengthen its National Electric System. In particular, solar energy is in the stage of providing an important contribution to meet energy needs in the electricity sector. The electricity generated by solar PV is less than 0.05 TWh in 2019.
- Solar energy is one of the fastest-growing forms of energy in power generation that is expected to show a gradual increase in the energy mix of Venezuela. This tendency is maintained by the important decrease in the cost of renewables with the support of investments, and new technologies.
- However, with the proposed solar projects, the solar energy market is likely to witness significant growth at a considerable rate during the forecast period.
Wind Potential is Likely to Hinder the Market
- As demand for energy is rising, Venezuela is turning toward the adoption of renewable energy as it has the ability to provide clean energy. The adoption of wind energy with advanced technology gradually makes wind energy a dominant type.
- The Paraguana Wind Farm (PEP) began a new phase of operations in 2019 aiming at the regional electric strengthening with its own workforce that has reactivated the production of 14 wind turbines, under the responsibility of Petroleos de Venezuela (Pdvsa), Paraguana Refining Center (CRP).
- At the end of 2019, Venezuela holds 71.28 MW of installed wind capacity much higher capacity compared to the solar PV installed capacity as of 2019. Venezuela is also planning to build wind farms with a generating capacity of 10,000 MW over the next 15 years.
- Venezuela has great potential to use power from wind energy and this, in turn, is expected to hinder the growth of the solar energy market during the forecast period.
The Venezuela solar energy market is consolidated. The key players in the market include SOLINAL C.A., and INGESOL CA.
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