Renewables investment dips in non-US Americas

Renewable energy investments in Brazil and the Americas (excluding the US) declined in 2016 from the previous year's level, following a global trend that put developed countries back in the lead on investments.

According to the the Global Status Report 2017 (GSR17) published by REN21, Brazil – the regional leader in Latin America – saw total investment in renewable energy and fuels decline to $6.8bn in 2016 from $7.1bn a year earlier. 

In the Americas excluding the US, investment tanked by 54% to $6.1bn in 2016 from $13bn in 2017.

In Brazil, the investment decline was led by a 15% fall in wind asset financing, reaching $4.9bn in the year. This was partially compensated for by a $1bn increase in asset financing for solar power in the country, the report said.

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Elsewhere in the region, Chile, Mexico and Uruguay registered 70% reductions in investments. Mexico faced relative uncertainty in 2016 due to the transition period from the old regime to the new legislation under its energy reforms. But now it has a new renewable energy pipeline after holding the first two tenders last year.

Chile and Uruguay are considered to be reaching a plateau for wind and other renewable energy technologies (topping 1GW of installed wind each) after rising constantly in recent years. The two countries, respectively, now have around 10% and 20% of their power demand met by non-hydro renewables.

Meanwhile Argentina saw a 356% increase in investments, reaching $400m as it implemented its 2015 renewable energy law. Elsewhere in Latin America, Peru and Bolivia also saw an increase in renewable energy investments, the report said.

In the first quarter of 2017 compared to same period a year earlier, investment continued to decline in developing countries, with Brazil falling 3%. Mexico, on the other hand saw a 47% increase in investments, reaching $2.3bn in the first three months of 2017.

Latin America and the Caribbean also saw a decline in new additions of wind to 3.5GW down from 4.2GW in the previous. Overall, the region reached 18.8GW, of which 10.7GW is now operating in Brazil, followed by Mexico with 3.5GW.

But Mexico installed only 500MW in 2016, down from 700MW in 2015, while Chile and Uruguay installed 500MW of wind each.

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The GSR17 report repeatedly referred to Brazil’s current economic and political instability and transmission bottlenecks, which have led to policy changes, but figures showed that Brazil still led the region in wind capacity and job creation.

In 2016, Brazil continued ranking in the top ten for new wind power additions, rising to ninth place as it added another 2GW, surpassing Italy. In 2015, it was in the tenth position even if it installed more (2.8GW) in 2015.

Wind power also created more employment in Brazil, totalling 43,000 jobs including installations and industrial roles, up from 41,400. Together with jobs in the biofuels industry, Brazil was the only country in Latin America to rank among the top 10 countries in renewable energy jobs. Brazil’s renewable energy industry generated 875,900 jobs, second only to China, with 3.6 million.

Brazil also saw its wind capacity factors rise in 2016 as newer turbine models started being installed, averaging around 43%. According to the report, that helped Latin America to lead onshore wind capacity factors throughout the world.