Mexico, Uruguay, Panama and the Dominican Republic are expected to set new capacity installation records this year while demand in Latin America is forecast to drop between 2017 and 2020, according to analysis from MAKE Consulting.
MAKE expects wind power in Latin America to reach 4.8 GW this year and 5.4 GW in 2016 – both setting new records.
MAKE expects Brazil to connect nearly 23 GW of new wind power capacity through 2024 – which will account for 43% of regional capacity installations in that time frame.
According to the firm, this year will be a critical time period for wind power capacity within the Brazilian power auctions, as a faltering economy and an extended power market crisis caused by prolonged drought are pushing demand for new power generation technology in opposite directions.
Wind power development in Mexico will accelerate in 2016 after the conclusion of electricity market reform, which began in late 2013. MAKE expects power purchase agreement signing activity to increase, as the country seeks to achieve its ambitious 35% non-fossil fuel generation target by 2024.
Elsewhere in Latin America, wind power development will be driven by a combination of high electricity prices and strong power demand growth. Further, wind power is proving to be highly compatible with hydroelectricity, which is the most prevalent generation technology in the region. Prolonged drought in several markets, such as Brazil and Panama, has highlighted the importance of diversifying renewable generation portfolios with wind power.
MAKE predicts another record year for regional wind power connections in 2016, led by a strong year for commissioning in Brazil, largely corresponding to the strong power auction performance by Brazilian wind power developers in 2013. Mexico will also support the forecasted regional record in 2016, as MAKE expects annual installations to eclipse the 1 GW level for the first time.
New grid-connected capacity installations will decrease in 2017 and 2018, after commissioning bubbles created by grid infrastructure delays are resolved in Brazil. Growing weakness within the Brazilian economy is likely to keep the country from replicating peak years expected this year and in 2016.