Latin America was defined as “the new frontier for clean and sustainable energy” in the report drafted by Green Energy Leaders, distributed by the WWF during the latest COP20 in Lima.
A little earlier, six countries within the region took the 12 first positions amongst the 55 most attractive emerging countries where to invest in clean energies, according to the Climascope 2014 study of the IADB (Inter-American Development Bank).
Latin America and the Caribbean are becoming greener. And the trend seems to have become unstoppable.
“We could reach very high percentages of autochthonous clean energies, increase our energy autonomy and obtain energy stable costs that persist in time, becoming then more competitive in the global picture”.
Ramón Méndez, ex former National Director of Energy of Uruguay
According to the Global Energy Assessment study, Latin America and Sub-Saharan Africa will experience the largest deployment of renewable energies in 2050, “which means that at least 40 per cent of their supply of primary energies will originate in renewable energies”.
Taking into account that the energy demand in Latin America and the Caribbean will treble the current demand in that year, the forecast seems ambitious. Although not farfetched.
“The region has enormous potential in renewable resources still to be exploited. It is estimated that —excluding hydroelectrical resources— it may reach 80 TWh*, somewhere near 22 times the expected demand for the region in 2050”, states in SciDev.Net Mr Tabaré Arroyo Currás, adviser of the global initiative for climate and energy of the WWF, based in Mexico and the author of the Green Energy Leaders.
Debunking the myths
Medium and long-term policies capable of driving renewable energies and key mechanisms supporting them, are part of the formula followed by the leading countries, states Mr Arroyo Currás.
The countries which lead the way in the exploitation of this potential are Brazil, Chile, Costa Rica, Mexico and Uruguay. The methods employed and the several myths debunked in their way to leadership would lay the foundations to reinforce similar initiatives in the region.
Uruguay plants to source 50 per cent of its primary energy from renewable energies by 2030; Mexico is working for a 33 per cent of clean energy by 2018 and Chile proposed to feed its electrical grid with 20 per cent of non-conventional renewable energies (NCRE) by 2025.
Costa Rica intends to land 2021 with 100 per cent of its energy being renewable, and Brazil, through its Programme of Incentives for Alternative Electricity Sources (2002), reached in 2013 over 2,200 MW of installed capacity in wind power stations. It expects to add further 7,000 MW towards 2016.
In all the above cases analysists predict that the targets will be met before the established timelines.
Brazil achieved nearly 80 per cent of its electrical grid with renewable energies in 2013 —mainly hydroelectrical power— and it is already a continental leader in wind power generation.
In Costa Rica, over 90 per cent of the electrical power is produced from hydroelectrical wind, geothermal, solar and biomass power. “The private sector aspires to increase its contribution to electricity production from the current 15 per cent of the total generated to at least 25 per cent, by means of a new law”, states in SciDev.Net Mr Antonio Monge, the President of the Renewable Energies Foundation of that country.
In Chile, where the NCREs already represent 11.17 per cent of the electrical grid, it is estimated that 20 per cent will be easily reached. “It would not be hard to reach 2025 with 25 or 30 per cent of NCREs”, states Mr Roberto Román, a consultant in renewable energies and an academic in the Faculty of Engineering and Mathematical Science of the University of Chile.
One of the reasons argued is that “renewable energy installation prices have dramatically decreased in the last three or four years”. In Chile this enabled, without the need of subsidies, in 2014 for 30 per cent of tenders in electricity supply to be awarded to companies generating NCREs.
“The great myth that renewable energies are more expensive has been debunked as well as the idea that each megawatt of NCRE requires 1 MW of conventional energy support [in order to avoid issues with resource intermittency such as wind and sun]”, points out Mr Román.
Uruguay is a living proof of it. Thanks to the structural transformation of its electrical industry, currently up to 40 per cent of the energy used originates in wind power.
An innovative mechanism of electricity distribution, where hydraulic power stations feed the grid only when wind resources cannot meet the demand, allowed a stabilisation of the electrical system and a reduction of the costs of power generation in the country up to 40 per cent, states in SciDev.Net Mr Ramón Méndez, the former national Director for Energy in Uruguay, and the actor of its energy policy.
The expert adds a third myth that has been debunked in his country: “a strong presence of the national government frightens the private sector away”.
He points out that clear rules, a commitment by all the political parties to support energy strategies in the long term and a strong presence of the State incentivising alliances between the private and public sectors and deciding when to incorporate renewable energies with more mature technologies, are incentives for private investors in a context where global warming brings uncertainty.
Financial and social benefits
Apart from the environmental benefits, the financial and social returns associated to the production of renewable energies also explains the push experienced by these clean resources.
Mr Monge estimates that reducing the imports of oil derivatives “would treble the GDP of Costa Rica in 2051 compared to the figure that would result in the event of continuing dependency on oil, and approximately 900 thousand employments would be created”.
Mexico gave a big push to human resources training at pre and post graduate levels in energy studies, reaching 26 per cent more graduates per capita in this area than the United States, according to UNESCO.
And Brazil attracted US$96 thousand million investment in clean energies between 2006 and 2013, equivalent to 75 per cent of the investment in the same sector in Latin America.
Its position as the main generator of wind power in the region has allowed it to become a producer of goods and services in this industry. By 2016, its wind power industry will supply 100 per cent of the domestic demand and will be the major manufacturer for most of Latin America, according to Green Energy Leaders.
“This currently contributes to position the cost of wind power production in Brazil below US$60 per MWh, whilst the spot price of electricity [or short-term commercialisation] exceeds US$80 per MWh”, according to Mr Arroyo Currás. And he continues to explain that the low cost of generating renewable power can allow a good range of uses or contribute to the reduction of the spot price, thus making electricity cheaper for the consumer.
Challenges and opportunities
In spite of the developments, the challenges to increase the use of clean energies in the region are huge.
They include the reduction of the US$40 billion currently being allocated to subsidise fossil fuels, exploiting the enormous wasted potential of solar and wind power and generating energy policies that ensure long-term stability and low risk to investors, according to the experts.
At present only seven per cent of the electricity produced in the region comes from solar, wind, biomass and geothermal power.
“But at WWF we believe it is possible to reach 100 per cent of global primary renewable energy by 2050”, states Mr Arroyo Currás. Mr Román believes this is imperative: “IPCC stated that by 2050 all energy worldwide must be produced without CO2 emissions. Otherwise, it will be impossible to limit the increase of temperatures by 2°C”.
In Mr Méndez’ view , it is key to progress towards a Latin American economy where clean energy potential is used to the most. And he assures that achieving this requires “teamwork in the region in order to achieve international complementing of renewable energies”.
This way “we could reach very high percentages of autochthonous clean energies, increase our energy autonomy and —on becoming independent from energy commodities such as coal, natural gas, oil and uranium— obtain energy stable costs that persist in time, becoming then more competitive in the global picture”.
And, why not, also worldwide leaders in clean energies.
* A TWh (terawatt/hour) equals the generation of a million million watts an hour