More than 47 gigawatts worth of new wind capacity is expected to be installed across Latin America over the next decade according to new analysis from MAKE Consulting.
Over 4.3 gigawatts (GW) of new wind capacity was commissioned over the past year, according to MAKE Consulting’s 2017 Latin America Wind Power Outlook, published this week, but political and economic instability in the region’s largest market, Brazil, is expected to trigger a slowdown of new capacity additions in 2019. Nevertheless, Mexico, Argentina, and Chile are all expected to somewhat offset the Brazilian decline by boosting their own wind power construction efforts.
Brazil has been the dominant market so far, installing 2.5 GW in 2016 alone, and exceeding 2.4 GW annually for three years in a row, but “MAKE predicts an impending cliff from 2019 due to slumping demand for electricity.” No new wind Power Purchase Agreements (PPAs) were signed at auction in 2016, and the highly anticipated Brazilian reserve power auction was cancelled within days of its intended date.
As mentioned, however, MAKE Consulting believes “Things appear more optimistic for other markets in Latin America,” with Mexico, Argentina, and Chile making up any lost ground.
According to MAKE, Mexico has so far implemented a long-term series of power auctions which will support the country’s target of 35% renewable energy. Auctions in 2016 helped sign wind power PPAs worth more than 1.4 GW at pricing as low as $32 per MWh — impressively low on the surface of it, even more so when you consider Mexico is not a traditional wind market such as is found in Europe and north of the border. Chile and Argentina themselves both awarded PPAs for nearly 3.5 GW of wind power in auctions over the past year. Argentina has set itself a target of sourcing 20% of its electricity from renewable energy by 2025, while Chile, as part of its own 20%/2025 target, connected 498 MW worth of wind power in 2016 and conducted a major multi-technology auction that covers its long-term demand from 2021.