Beginnings have been modest to date. At the end of 2009, only 1,072 MW of wind power capacity had been installed across the entire region. 505 MW of this was installed during 2009, with new wind farm installations in six countries.
There are signs, however, that wind power is now finally reaching critical mass in a number of Latin American markets, and that the region is on the verge of developing a substantial wind turbines industry to complement the region’s rich hydro and biomass (and potentially solar) resources.
However, we have to bear in mind that Latin America is far from being a homogeneous region. In fact, the continent’s 40+ countries and overseas territories are at vastly different stages of economic development. There are a number of emerging economies in the region whose per capita income is similar to – or greater than – that of some new EU member states; yet at the same time the region is still plagued with extreme poverty and underdevelopment in some countries and sub-national regions.
Wind energy is making the most progress in Brazil, the region’s largest economy. This country has areas with tremendous potential for wind energy, combined with a growing electricity demand and solid industrial infrastructure.
Brazil has historically relied heavily on hydro power generation, which until recently produced 80% of the country’s electricity needs. As wind and hydro power work well together within a power system, this combination forms an ideal basis for large-scale wind power development.
After a few early developments in the first half of this decade, the Brazilian wind farm market now seems to be taking off. In 2008, 94 MW were added, and another 264 MW in 2009, meaning that 606 MW were in operation by the end of 2009.
During the first half of 2010, another 180 MW had been added, with nearly 300 MW more under construction. Cumulative installed capacity should reach more than 900 MW by the end of the year.
Wind farm projects awarded through the PROINFA programme account for over 95% of wind power installations to date in Brazil. This programme was initially passed by the Brazilian Congress in 2002 in order to stimulate the addition of over 1,100 MW of wind energy capacity, which was later expanded to 1,400 MW.
It looks increasingly likely that the 1,100 MW target will be met, if not necessarily the full 1,400 MW. In December 2009, the Brazilian energy regulator, Agencia Nacional de Energia Eletrica (ANEEL), hosted the country’s first wind-only auction. Through that, 71 wind farm projects were contracted for a total capacity of 1,800 MW. Two more wind turbines auctions took place at the end of August 2010 with a total contract volume of about 2,000 MW.
Argentina also has massive wind resources. Some analysts claim that the winds in Argentina are sufficient to supply Latin America’s entire electrical demand seven times over.
A tentative start at developing this resource was made during the 1990s; in fact, that is when almost all of Argentina’s currently operating wind farms were built. Since then, the country’s wind energy market has languished.
New hope has now arisen with the tender of 500 MW of wind power under the GENREN programme with a target of 8% renewable electricity, and several new projects are under development.
Another promising wind turbines market is Chile, which had nearly 170 MW in operation at the end of 2009. A number of large wind power projects are under development, and they are desperately needed to help alleviate chronic gas shortages.
Other wind power markets in the region include Costa Rica, which had about 120 MW of wind power at the end of 2009, and a new 50 MW project is expected to come on line in 2010; Peru, which had nearly 150 MW under construction at the end of 2009; Uruguay, which has a target of 500 MW by 2015; Venezuela with 100 MW currently under construction, scheduled to come on line in 2011; Jamaica, with 23 MW installed capacity, and Nicaragua, which added 40 MW of new wind 2009, thereby joining the list of countries with commercial-scale wind power development.
Finally, although there is some development of wind power in the island economies in the Caribbean, which currently mostly rely on imported fossil fuels, wind power could play a much more substantial role in helping grow their economies on a more sustainable basis.
Unfortunately, however, all of these early markets suffer from the lack of a clear, long-term policy framework for the development of a wind power industry, which continues to hamper market development. Signals are needed from governments indicating to the private sector and the finance community that there is clear political commitment to develop renewable energy in general and wind power in particular.
This would at the same time foster economic development, attract investment and create the ‘green’ jobs that have been the object of government policy in many other parts of the world – as the scenario figures underline.
The GWEO scenarios For Latin America
GWEC expects wind energy installations in Latin America to be considerably stronger than previously thought, with encouraging developments in markets such as Brazil, Argentina and Chile.
Under the Reference scenario, wind power could provide Latin America with 26 TWh of electricity every year while saving 15.6 million tonnes of CO2 emissions by 2030; or it could, under the Advanced scenario, generate nearly ten times as much (231.4 T Wh) and save 139 million tonnes of CO2 emissions per year by then.
This stark difference underlines the enormous impact that a positive political framework can make across this wind-rich continent. Under the Reference scenario there would be 10.5 GW of wind turbines installed across the entire continent by 2030. This would, in fact, mean that the annual market would shrink from the 505 MW installed in 2009 to as little as 200 MW by 2015.
Only by 2030 would it again reach its current size, according to the IEA’s Reference Scenario. The Moderate scenario, which takes into account current policies and targets, foresees a much more rapid development, with annual additions reaching 3,000 MW as early as 2015, and more than 5,000 MW by 2030.
This would bring the total installed wind capacity to 28 GW by 2020 and 72 GW by 2030. The impact on electricity production would be considerable, with 68.7 TWh of wind power generated in 2020 and 176.7 TWh in 2030.
The Advanced scenario outlines that even more could be achieved, given the extraordinary wind conditions in many Latin American countries. If fully exploited, wind power could boom here, with more than 13.3 GW of wind power installed across the continent in 2015. This could then go on to increase to 42.2 GW by 2020 and as much as 93.3 GW by 2030.
With such a development, wind power would start to account for a significant part of electricity demand, producing more than 100 TWh by 2020 and 231 T Wh by 2030.
Wind power developed at such a scale would not only strengthen Latin America’s energy independence, but it would also have a direct impact on regional economic development and jobs.
In terms of employment, there were about 7,400 jobs in the Latin American wind turbines sector in 2009. Under the Reference scenario, this number would fall to just over 3,600 by 2015 and only reach current levels again in 2020.
The Advanced scenario shows that from 2015 to 2030, the sector could, each year, have employment figures more than ten times as high as in the Reference scenario, reaching 100,000 by 2030.
Equally, wind power would attract substantial investment; the Advanced scenario estimates that Latin America’s wind sector could be worth as much as €4.3 billion each year as early as 2015, growing to €6.5 billion by 2030, compared to just €680 million in 2009.
Please note that Mexico is part of OECD North America, according to the IEA’s classification which is used in this report for comparison purposes.