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24 01 GLOBAL OVERVIEW SIDEBAR 2. REGIONAL SPOTLIGHT: LATIN AMERICA AND THE CARIBBEAN Increasing interest in renewable energy in the Latin America and the Caribbean (LAC) region is reflected in ambitious targets and policy support, which have led to rapidly growing investments in renewables, beyond the traditional hydropower sector. By early 2014, at least 19 countries in the region had renewable energy policies, and at least 14 had renewable energy targets, mostly for electricity generation. (See Table 3 and Reference Tables R12 to R15.) For example, Uruguay aims to generate 90% of its electricity from renewable sources by 2015, while Grenada targets 20% primary energy from renewables by 2020. Renewable energy already meets a substantial portion of electricity demand, with hydropower accounting for around half of the region’s total installed power capacity and the vast majority of its renewable power capacity. Especially in Central America, the need for a diversified electricity mix to reduce vulnerability to a changing hydrological profile is driving interest in other abundant renewable energy resources. In Brazil, hydropower expansion is expected to become increasingly constrained by environmental sensitivity and the remoteness of much of the remaining resource. In the Caribbean, countries are aggressively pursuing the deployment of renewables to reduce their heavy reliance on fossil fuels, and thereby increase their economic and energy security. Despite having an average electrification rate of almost 95%, one of the highest among the developing regions, energy access remains a challenge for the LAC region: an estimated 24 million people, primarily in rural and remote areas, still lack access to electricity. Some countries have achieved virtually 100% electrification, while others have far to go. Renewables can play an important role in achieving universal access to modern energy. Solar energy is abundant across the region, which is also home to nearly one-quarter of the world’s geothermal potential, and wind resources are world class in Argentina, Brazil, and Mexico. By one estimate, non-hydro renewable energy has the technical potential to meet more than 50 times the region’s current electricity demand. While the region’s hydropower sector is relatively mature, the vast potential of non-hydro renewables is now beginning to be realised. Wind power has experienced the fastest growth in recent years, with Brazil and Mexico leading the way. With about 1 gigawatt (GW) of geothermal capacity, Mexico is the world’s fifth-largest geothermal power producer, followed in the LAC region by Central America, with a collective 500 MW of capacity. The solar PV market, while increasingly important in off-grid and rural areas, has experienced a shift in focus from small domestic applications to large-scale power plants. In the heating sector, renewable energy applications for domestic, commercial, and industrial use are gaining ground. Solar thermal collectors for water heating are spreading beyond Brazil, one of the world’s top markets. Chile’s mining industry is actively installing solar thermal systems (parabolic trough and flat-plate collectors) to meet its heat energy needs in remote locations. Solar food dryers are used for processing fruits and coffee in Jamaica, Peru, and Mexico. Over 80% of the LAC population lives in cities, and the region is urbanising at a rapid pace, with increasing demand for transportation. To meet this demand while slowing the growth of fossil fuel consumption, several countries are promoting the use of biofuels. Biofuels account for 13% of transport fuel in Brazil, and their role is growing in several other countries. Brazil, Argentina, and Colombia lead the region for biofuel production. Several countries have adopted feed-in tariffs, public competitive bidding (tendering), tax incentives, and quotas to drive deployment. The use of public competitive bidding has gained momentum in recent years, with Brazil, El Salvador, Peru, and Uruguay issuing tenders in 2013 for more than 6.6 GW of renewable electric capacity. Eight countries had net metering laws by year’s end, with pilot projects operating in Costa Rica and Barbados. An improved environment for renewables is attracting new national and international investors. Although Brazil experienced a decline in new investment in 2013 for the second year running, others in the region saw significant increases, with Chile, Mexico, and Uruguay committing over USD 1 billion each. Manufacturers are seeking growth opportunities in the region. While the larger economies–Brazil, Argentina, Chile, and Mexico–are the front-runners, manufacturing of renewable energy technologies, such as wind turbines, is spreading across the region. Differences in electricity market structures and regulations have constrained efforts to integrate electricity markets regionally to date, and lack of transmission infrastructure has delayed the development of some projects. Lack of awareness about renewable heat technologies and their potential is impeding their expansion. In addition, the relatively low level of energy demand in some countries—such as the Caribbean nations—makes it difficult to support local industry and can preclude the potential to benefit from economies of scale. Despite a number of near- term challenges, the region is demonstrating unprecedented growth and presents significant opportunities for expansion. The “Regional Spotlight” sidebar appeared for the first time in GSR 2013 and is now a regular feature of the report, focussing on developments and trends in a different world region each year. Source: See Endnote 20 for this section.PDF Image | About ElectraTherm
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