NEW ENERGY IN LATIN AMERICA

Why Latin America is perfect for renewable energy

JamesMcKeigue, March 19, 2013 (MoneyWeek)

“…[Latin America’s breathtaking, extreme geography] creates ideal conditions for renewable energy…[R]enewable technologies such as wind and solar power have been slow to get off the ground in Latin America, but that looks like it’s starting to change…

“…[M]odern large-scale hydropower plants are common…in Latin America…[T]he next wave of renewable technologies – solar and wind – have been much slower to take off…Latin America has just 1.3% of the world’s installed wind power capacity, while its share of the solar market is even smaller…[They] were long seen as a luxury for rich countries…Latin America also had more pressing priorities…With waiting times going up, capacity constraints across the board and more contracts than they could handle, few firms felt the need to bother with Latin America.”

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“…[But as a result of more efficient turbines and solar panels], the cost per kilowatt hour (kWh) has come tumbling down…China now has several of the world’s largest renewable energy firms. And their low-cost products are helping to reduce prices further still…Another change has been the collapse of renewable energy investment in Europe. Countries such as Spain, Italy and the UK have cut back on generous subsidies as they struggle to get to grips with their debt.

“Of course, these developments haven’t been good for renewable energy firms. Unsurprisingly the collapse of a major market, combined with falling prices, has hit the industry hard. Many companies have gone bankrupt, while others now trade at a fraction of their former price. Even the seemingly all-conquering Chinese players are struggling…[I]t’s been a painful time for renewable energy investors, but it has a silver lining for Latin America. Desperate renewable energy firms are now looking for new markets, and Latin America looks very attractive…”

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