Wind power catches political-economic breeze in Latin America
“Latin America has become the hottest growth market for the wind energy industry at a time when growth rates in other markets are flat due to a variety of policy and macroeconomic challenges,” states the Navigant report published this week.
“Globalization is driving sustainable economic growth in most Latin American countries, resulting in greater energy demand,” the analysis found. “Wind is increasingly viewed as a valuable and essential answer to increasing electricity generation across most markets in Latin America. Strong wind resources, coupled with today’s sophisticated wind turbines, are providing cost-effective generation that is competitive with fossil fuel generation.”
According to the analysis, the region will roughly double its annual wind energy installations over the next 10 years, from the current 2.2 gigawatts of generation to an expected 4.3 GW by 2022.
“With the strong political support of most governments and rapid economic growth fueling rising electricity demand, wind markets in the region are expected to exhibit double-digit compound annual growth rates through the next 10 years,” Feng Zhao, study author and a Navigant research director, said in a statement.
Globally, Latin America is expected to account for at least 5.5 percent of new wind power installations this year, according to the Navigant analysis.
Up from zero megawatts
Brazil, for example, recently auctioned bids to add more than 1,500 megawatts of new wind power capacity, up from zero as recently as five years ago. The new wind power development — along with planned expansions of hydropower, Brazil’s No. 1 source of electric power, and a projected surge in shale gas production — should help drive the world’s seventh-largest economy well into midcentury, experts say.
According to Brazilian wind power industry officials, the country has an estimated 300 GW of generation potential, and the energy industry is expected to add roughly 2,500 MW of new wind energy annually through 2020, amounting to a roughly $50 billion investment.
Mexico, too, has witnessed an explosion of wind power development since the early 2000s, according to a 2012 report from the Woodrow Wilson International Center for Scholars. Development has been most robust in the Oaxaca region of southern Mexico, but wind farms have also been permitted in Baja California, Tamaulipas, Nuevo León, San Luis Potosí, Veracruz and Chiapas, according to the report.
Much of Mexico’s wind energy expansion has come via purchase contracts between developers and private entities such as Cemex, Volkswagen, Grupo Bimbo and Wal-Mart de México y Centroamérica. Yet even more growth will come if Mexico adopts a new “carbon tax” recommended by President Enrique Peña Nieto that will drive up the cost of both domestically produced and imported fossil fuels.
Mexico’s fast pace of development has given rise to concerns that wind developers are running roughshod over local landowners with regard to turbine siting, land ownership and profit sharing. And as in Brazil, Mexico’s energy development efforts are hamstrung by an underdeveloped transmission system needed to deliver wind energy from production areas to load centers.
Other analysts, such as Nestor Lunas of the Ecuador-based Latin American Energy Organization Olade, have estimated that the region could generate upward of 10 GW of wind energy by 2020. Beyond Brazil and Mexico, wind energy has seen sustained growth in Costa Rica, Argentina, Uruguay, Venezuela, Colombia, Chile, Peru and the Dominican Republic, Lunas told RenewableEnergyWorld.com late last year.