Latin America is expanding as a clean energy region with vast growth expected throughout the next five years. Rystad Energy, an energy analyst firm in this region, stated that the increasing contracts and incentives for the renewables are propelling renewables’ penetration through the Latin American nations. Rystad Energy estimates the renewable energy potential to be visible in the coming years, with the energy increasing from the current 49 GW to over 100 GW.
The countries making up Latin America have all championed the procession of the renewable energy programs and contracts, making Brazil a country to watch because of its seemingly fastest transition to the renewables. The government is predictably going to witness a high quantity of renewable energy because it reduces the prices for the renewable energy facilities promoting their development even amid the coronavirus pandemic. Nevertheless, Mexico is an unpredictable species after the country witnessing political unrest.
The Latin American countries have vast land pieces, which, when coupled with low prices of renewable energy resources, allows for the installation of renewable energy facilities. The renewables began leading the energy industry immediately after their inception and approval in the Latin American nations. Rystad Energy anticipates renewable energy projects and production to increase and replace 70 percent of the current electricity supplied from other sources.
Rystad Energy‘s Minh Khoi Le explains that the unrestricted legal requirements in Latin America allow for investors in the renewables to cash into the projects in these countries. Minh added that European energy investors have loved investing in these five countries because of their leniency over renewable energy projects.
European companies like Enel and EDF have invested heavily in renewable energy projects in Latin American countries. These companies are widening their operations to cover even the remotest of places in Latin America.
However, Mexico is still under political wary, making it unsuitable for investment. Additionally, the president of Mexico has declared his support for state-owned energy companies scaring away investors. The president also allowed the parastatals to cheaply obtain renewable energy contracts making foreign investment in these projects to lose value.
Finally, Brazil will be the leading renewable energy pioneer after the completion of its renewable energy projects. This statement is valid because it is open to foreign investments and agrees with the Paris agreement, which champions emissions reduction. Latin America will demonstrate the ideal situation in which renewables will resolve the climate change problem.