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The Latin American wind generation sector's journey of the past
decade is nowhere near as wild as what the coming decade promises
if climate goals are to be met, panelists said 8 November at a side
event at the COP26 meeting that is intended lay out the path to
such targets.
In the 2010s, wind capacity increased from 2 GW to more than 31
GW, which was a "colossal effort," Ramon Fiestas, Global Wind
Energy Council (GWEC) director for Latin America, said during an
event held by the trade body during the key climate change meeting
in Glasgow.
The COVID-19 pandemic didn't halt the installation of renewable
power capacity in Latin America, Alfonso Blanco, executive
secretary of regional renewables trade group OLADE, told attendees.
Some 61% of regional power capacity added in 2020 was renewable, he
said, with 5 GW installed, including 3 GW of wind.
At COP26's predecessor, COP25, held in Madrid in December 2019,
a group of 10 Latin American and Caribbean nations unveiled a goal of sourcing 70%
of their power needs by 2030, or 312 GW of generation capacity. At
the time, according to OLADE, the countries that signed up to the
pledge were sourcing 56% of their needs from renewable energy.
But Siemens Gamesa Global Head of Public Affairs Jon Lezamiz
Cortazar said the Latin American renewable power sector must see a
stronger political commitment to create the stable investment
environment required to meet climate goals.
Reaching that 70% target will be impossible without offshore
wind, Fiestas told the COP26 side event, and if the goal is to be
met, public-private partnerships will be needed.
However, he said subsidies for renewable energy in Latin America
are rare, largely because zero-emissions generation is already
competitive in the region
Brazilian Ministry of Mines and Energy Special Advisor Agnes Da
Costa told event attendees there would be no subsidies for
renewable power in a country that ranks in the top 10 for emissions
on a country-by-country basis, as the cost goes directly on the
bills of customers, and bills are already expensive
The group setting the 70% target didn't include Brazil, the
largest power producer and economy in the region, which relied on
renewable sources for 85% of its 2020 electricity needs, according
to US Energy Information Administration (EIA) data.
Some 66% of Brazil's power output in 2020 was hydro-electric,
the EIA data show, a dependence that hurt the country when a
historic drought choked flows at dams in 2021 to levels not seen
since records began, forcing the government warn consumers to curb
their electricity consumption in August and September.
Integrated market?
The impact of the drought could have been minimized by an
integrated power market, OLADE's Blanco told event attendees. He
said OLADE is working with the Inter-American Development on plans
for a power market that would span five Southern Cone
nations—Brazil, Argentina, Uruguay, Chile, and Paraguay.
While current bilateral power agreements are "very good," said
Blanco, there is a need to move forward. If Latin America wants to
improve on the business-as-usual scenario, then barriers to
renewable energy must be removed, he said, and fiscal and
regulatory frameworks need improving.
Wind generation is another way for Brazil to reduce its reliance
on hydropower and is on the rise, according to the country's wind
power trade group ABEEólica, hitting 19 GW in June. GWEC
data show Brazil held seventh spot in the global rankings for
installed capacity for the second year running in 2020, the trade
group said. Brazil installed the third most capacity in 2020,
according to the data.
Brazilian facilities' capacity factor (or how efficiently it
captures the strength of the wind) has aided the sector's growth,
ABBEólica said, noting that in 2020 it was 40.6%, compared with a
world average of around 35%. By 2024, Brazil will have at least 30
GW of installed wind power capacity, it said
"We say 'at least', because this is the value considering only
auctions already held and contracts signed in the free market. With
new auctions, this number will be higher," ABEEólica Executive
President Elbia Gannoum noted in June, adding that 2020 was
challenging, least of all because Brazil held no auctions for wind
leases.
It could be much more, Brazilian Mines and Energy Minister Bento
Albuquerque said earlier in the COP26 meeting. Brazil has the
potential for 700 GW of offshore wind capacity, he said, adding
that offshore wind would make its debut in energy auctions in
2022.
Investors are also optimistic about the potential for Brazilian
renewable generation. Brookfield Renewable Partners, which is
building 1.8 GW of solar capacity in Brazil, sees a positive
marketplace, with increasing power prices, the investment group
said when releasing its third-quarter
2021 results on 5 November.
The unit of Canadian investment group Brookfield Asset
Management is also in the process of acquiring a 270-MW wind
development portfolio in Brazil alongside institutional partners
that is expected to close in the fourth quarter of 2021.
Chile's plan
Investors are also keen on the investment horizon in Chile,
where the government released a long-term energy strategy in late
October, building on plans to become one of the
largest producers and exporters of green hydrogen globally.
The roadmap—with targets for
key years—would allow Chile to become carbon neutral and
climate resilient by 2050 at the latest, the country's environment,
energy, and science ministries said in a joint statement as the
plan was laid out in anticipation of delegates heading to COP26
Juan Carlos Jobet, who has both the energy and key mining
ministry briefs, said the "transformation of the energy sector is
at the heart of the Long-Term Climate Strategy. We are going to
clean up our power generation, eliminating coal-fired plants and
developing renewable energies to produce electricity that can be
used in different economic sectors like transport and industry, and
in our homes."
By 2025, Chile aims to eliminate 65% of coal-fired power
generation from its stack. By 2030, it aims to generate 80% of the
country's electricity from renewable sources and to implement
zero-emission fleets in large-scale mining (Chile is the world's
largest copper producer and mining accounts for 50% of exports). By
2040, all of Chile's coal-fired plants will be shut or converted,
green hydrogen will make up 20% of the country's fuel matrix, and
100% of buses and taxis will produce zero emissions.
The government is already greenlighting projects, including what
Minister of National Assets Julio Isamit called the "largest tender
of the last decade" for renewable energy. Projects accounting for
up to 2.78 GW of renewable power won approval from the government, equivalent to
11% of Chile's overall power generation capacity. Of the capacity
total, 1.746 GW was wind and 1.034 GW solar. The projects will cost
a combined $3.1 billion to build.
Winning bidders included AES Gener, EDF Chile, Enel Green Power,
Statkraft, and Grenergy Renovables Pacific.
Norway's Statkraft won the rights to develop more than 400 MW of
wind and storage capacity from the Ministry of National Assets, the
company said. Statkraft expects the project to cost about $500
million to develop, with the facility due online by 2030, a
deadline the wind farm will beat by "several years." The company is
already developing three wind farms in Litueche (southwest of the
capital city Santiago) with a combined capacity in excess of 100
MW.
Colombian tender
Late October also saw a government renewables tender conclude in
Colombia. On 26 October, the government awarded contracts to 796.3 MW
of solar projects. The energy and mining ministry said the 11
projects must be online by January 2023. Winning bidders won
15-year contracts.
When the capacity is online, the share of non-conventional
renewable energy will have risen from 0.2% in 2018 (when President
Iván Duque Márquez was elected) to more than 15% in 2023.
Currently, Colombia has 388 MW of cumulative operational solar
capacity, the ministry said. Some 1.365 GW of solar and wind energy
is under construction following a 2019 auction, it added.
Márquez told CERAWeek by IHS Markit
conference attendees in March that when he became head of state,
Colombia had just 35 MW of non-conventional renewable capacity. The
country will hold auctions to build 4.8 GW of renewable generation
capacity, which will be installed in the next five years, he told
CERAWeek attendees.
