Introduction: An Emerging Market

In a global context, Latin America remains one of the smaller markets for wind power, overshadowed by the US, the EU and especially China. The Asian country has been largely responsible for the wind industry's double-digit growth over the last few years, installing 23.3GW of the 54.6GW of new wind capacity added during 2016, according to the Global Wind Energy Council (GWEC).

By the end of last year, wind parks in China accounted for 168.7GW (over one-third) of the 486.8GW installed worldwide. The next largest markets by cumulative installed capacity were the US (82.2GW), Germany (50GW), India (28.7GW) and Spain (23.1GW). Latin America, by contrast, had installed 18.8GW of wind capacity by end-2016.

On the other hand, the wind industry has only just recently started to take off in Latin America, a relatively late adopter of the technology. Around 85% of its wind capacity was built after 2011, and there remains ample untapped potential in most countries that have already built wind farms, while exciting new markets are emerging elsewhere in the region.

Wind power is an attractive, local alternative energy source for many Latin American countries looking to diversify the electricity supply and reduce consumption of expensive fuel imports. In most countries, wind is now cost-competitive - or nearly there - with conventional sources of electricity, namely large hydro and natural gas. It is also a potential salve for the energy security risks faced by the region's hydro-dependent power grids; more wind tends to blow during droughts in many areas.

Due to the prevalence of hydropower, Latin America's electricity sector is one of the cleanest in the world in terms of CO2 emissions, so decarbonization is not as major a driver of local renewables markets as it is in other regions. But rising local concerns with climate change, along with the recent COP21 climate accords in Paris, have given many Latin American policymakers further motivation to promote wind and other renewable sources.

This report will examine the challenges and opportunities for wind power in Latin America, as well as the major trends affecting the development of this energy source.

Figure: Installed Capacity


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