Chile is a pioneer in power sector liberalisation and was one of the first countries in the region to implement a clean energy mandate.
In addition to its 5 per cent renewable energy obligation – set to rise 0.5 per cent a year until 2025 – Chile offers tax incentives for renewables.
Meanwhile, Uruguay’s clean energy trajectory can be traced to a power shortage caused by low water levels in the early-2000s, which left its large hydro-dependent power matrix exposed to imports.
Seeking to diversify, in 2008 the Uruguay government set a national clean energy target to add 200 megawatts (MW) of biomass and 300MW of wind energy by 2015.
In Brazil, Rio’s Maracana Stadium, which will stage the final of the 2014 World Cup, will be powered by more than 1,500 solar panels – a high-profile project that demonstrates the country’s dedication to achieving its ambitious target for renewable electricity generation of 75 per cent by 2030.
“Brazil is very open to renewables technology,” says Rafael Bianchini, managing director of See Algae Technology Brazil (SAT), which designs infrastructure to produce biomass from algae.
SAT is headquartered in Austria, but has recently entered a joint venture with a Brazilian company in Recife to set up Brazil’s first algae production plant. “New technology is welcomed – it’s easy to sell into a country that loves renewables,” he says.
The world’s ninth largest energy consumer has made great strides in clean energy. It is the world’s sixth largest investor in renewable energy, according to a report from consultants KPMG.
And Brazil has attracted close on 80 per cent of new financial investments in clean energy in Latin America and the Caribbean between 2006-11, according to Climatescope, a report commissioned by the Inter-American Development Bank from Bloomberg New Energy Finance (BNEF), a clean energy research company.
That investment has risen rapidly, from $5.2 billion in 2006 to $14.3 billion in 2011, and much of the impetus has come from government schemes offering tax incentives and cheap finance from the state development bank BNDES.
“Brazil’s capital markets are also more developed than other countries in the region,” says Maria Gabriela de Rocha Oliveira, head of Latin America research and analysis with BNEF, pointing out that BNDES has funded about $15 billion of clean-energy projects to date.
Certainly the country has an enviable natural resources profile, with water, wind and sun in abundance. Historically the country has focused on large-scale hydropower; the world’s largest hydro-electric dam, Itaipu, built nearly 40 years ago, now generates between 20 and 25 per cent of the country’s electricity; the Belo Monte dam on the Xingu River, now under construction, is forecast to deliver a further 11,233MW of energy.
But environmental concerns over large-scale hydro projects – work on the Belo Monte dam has been challenged in the courts for displacing indigenous peoples and cutting a swathe through the Amazon rainforest – and dry weather leading to blackouts, has brought other renewable sources into the spotlight.
The Global Wind Energy Council, a Brussels-based lobby group, forecasts Brazil’s installed wind capacity at more than 6,000MW by 2019 and last year’s wind power auctions attracted huge international interest from companies looking to capitalise on the country’s projected 60 per cent increase in demand for energy in the next decade.
Heavy competition in the wind power auctions pushed prices down to potentially unsustainable levels, according to consultants Ernst & Young. In its Renewable Energy Country Attractiveness Indices, published in May, Brazil dropped down the rankings “following indications in Q1 [the first quarter of the year] that almost one gigawatt (GW) of wind projects secured in last year’s auction are delayed with no certain start date”
