A growing list of wind and solar mega-projects will help Latin America renewable energy capacity more than double to 123GW as soon as 2025 and send clean power prices plunging, said analysts at Rystad Energy.
The region, which currently has 49GW of renewables installed, will see its biggest increases in Brazil, Mexico, Chile, Colombia and Argentina, said the Norwegian energy research group.
Years of auctions held in those five nations have created massive pipelines as large as 50GW in Brazil and 40GW in Mexico.
With clean power prices dropping to the mid-$20’s/MWh, and even as low as $18/MWh in Brazil, auctions are likely to move forward in most countries despite Covid-related delays. However, Rystad warned that the future of Mexico’s renewables programme remains unclear after the recent political tumult.
The low prices combined with land availability have led to increasing competition, giving rise to a wave of very large projects.
Rystad expects the popularity of mega-capacity projects will continue, making up around 70% of the total wind and solar assets in the Latin America region by 2025.
“The proliferation of mega-scale projects, and the relatively consistent auctions with little to no local content requirements make Latin America a good market for large European developers,” said Minh Khoi Le, renewable energy analyst at Rystad Energy.
The majority of the top ten companies with the largest renewables capacity in Latin America hail from Europe. Companies such as Enel, Iberdrola, EDF and Engie are all among the top five and have dominated auctions in Latin America, especially in Brazil, Mexico and Chile.
Rystad points out that at present, the Villanueva solar PV site in Mexico, owned by Enel, is the largest solar farm in the region, boasting 828MW of capacity. Yet Villanueva will soon be surpassed by Brazil’s 1.3GW solar PV farm in Minas Gerais, owned by Aurora Energias.
Brazil is also the home of multiple mega wind complexes, such the 716MW Ventos de Santa Angela (Lagoa dos Ventos) by Enel, and Engie’s Campo Largo complex, which consists of Campo Largo 1 (326.7MW), Campo Largo 2 (361.2MW) and the Umburanas (342.5MW).
Brazil’s government sees the potential to deploy 16GW of offshore wind capacity by 2050, according to a long-term energy expansion plan put out for public consultation in July.