Brazil will spearhead renewable energy additions in South America to 2017, with the country’s cumulative installed capacity expanding from 19.8 Gigawatts (GW) in 2013 to over 32.9 GW by 2017, representing a Compound Annual Growth Rate (CAGR) of 4.17%, according to research and consulting firm GlobalData.
The company’s latest report* also states that Chile will see the fastest increase in renewables over the forecast period, with cumulative installed capacity rising from just 1.06 GW in 2013 to 5.37 GW by 2017, at an impressive CAGR of 50.12%.
Ankit Mathur, GlobalData’s Practice Head for Power, says South American countries are exploring opportunities in the power generation mix, led by Brazil and its pro-renewable approach, which includes national tenders that attract both foreign and domestic investment.
Mathur explains: “Brazil is looking to increase power generation from renewable energy sources and is aiming for 10% of its annual generation to come from these sources by 2020. In order to achieve this target, the Brazilian government introduced the Program of Incentives for Alternative Electricity Sources (Programa de Incentivo a Fontes Alternativas de Energia Elétrica; PROINFA) in 2002 to boost renewable energy adoption.
“The first phase awarded auctions for 3.3 GW of wind, biomass and small and medium-sized hydropower plants in 2004. PROINFA was succeeded by auction procedures in 2011, to encourage further development of the power generation sector.”
While biomass accounted for the largest share of Brazil’s renewable energy mix with 50.1% in 2014, wind power capacity is expected to become the new leading sector with a 41.4% share in 2017, up from 27.3% in 2014, according to GlobalData.
Meanwhile, renewables are expected to see the largest growth in Chile’s overall power sector, with the country beginning to harness its significant potential in solar, wind and geothermal power.
Mathur continues: “Wind accounted for the largest share of 39.9% in 2014, followed by biomass with 22.2% and solar with 19.2%. With 16 new solar photovoltaic projects planned in Chile this year alone, solar power capacity is expected to become the new leader with 47.6% in 2017, as wind power slips to second with a 34.7% share.”