Contents

Introduction

The year 2019 will be crucial in the implementation of unconventional renewable energy in Latin America. The combined result of policies designed to achieve different objectives - from reducing greenhouse gas emissions and slashing electricity prices to modernizing the generation mix and promoting greater competition - a significant number of wind and solar generation projects are expected to come online in the coming months.

A large number of these projects are concentrated in four countries: Brazil, Mexico, Argentina and Chile. In addition to their sheer size, Mexico and Brazil feature prominently because of clear strategies to advance the sector's decarbonization by creating competitive environments in which non-conventional renewable energy (NCRE) can deploy its advantages.

Other sizeable markets, such as Colombia and Peru, on the other hand, have shown relatively slow progress in the implementation of NCRE. In Colombia, which has vast hydroelectric generation potential, the government strategy to expand backup capacity has mainly been aimed at the construction of conventional thermoelectric plants. Colombia's first NCRE auction, originally scheduled for January 2 of this year, was postponed until February 20. Colombia has only one wind farm in operation, with 19.5MW of capacity, and two solar power plants of 6MW and 19MW.

In Peru, the generation cost structure around natural gas - a strategy designed to encourage its use when the Camisea gas project was developed more than 15 years ago - has created a difficult competitive environment for other technologies, including wind and solar, despite their high potential in the country.

Although the vast majority of project startups in 2019 correspond to photovoltaic solar and wind power plants, investments are also being made in small hydroelectric, biomass and cogeneration plants. Geothermal energy, meanwhile, remains relegated due to its high costs compared to solar and wind.

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