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The development of Latin America's green energy industry speeded up

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Facing the new trend of global green development, many countries in Latin America have taken the development of green renewable energy and accelerating energy transition as one of the main means of economic recovery after the epidemic, and strive to achieve economic growth and sustainable social development.

In recent years, countries in the Latin American region have continued to introduce relevant policies and measures to promote the accelerated development of the green energy industry. Data show that in 2019, Latin American countries attracted a total of 18.1 billion U.S. dollars in renewable energy investment, making it one of the world's important investment destinations for renewable energy. Fitch, an international rating agency, believes that the investment momentum in the renewable energy industry in Latin America will continue to grow in the future, and the prospects are promising.

Project construction is in the ascendant

On a vast desert land 15 kilometers away from the small Chilean city of Diego de Almagro, construction workers are intensively working under the sun. A photovoltaic power plant with an investment of approximately US$90 million has officially started construction a few days ago. According to reports, by the third quarter of this year, new photovoltaic power plants composed of nearly 240,000 photovoltaic modules will be erected, with a total installed capacity of 104 megawatts. At the same time, three small photovoltaic projects belonging to the same company will soon be launched in the Valparaiso area. After completion, the 4 photovoltaic projects will reduce Chile’s carbon dioxide emissions by 235,000 tons per year.

In recent years, the renewable energy industry in Latin America has developed rapidly. According to the UN Economic Commission for Latin America, the proportion of renewable energy power generation in Latin America, such as biomass, solar, wind, and geothermal, has increased from 4% in 2010 to about 12% in 2018. Many countries are vigorously developing clean energy, and this industry is expected to become one of the engines of economic recovery in Latin America, creating 7 million jobs in the next 10 years.

Statistics from the Brazilian Photovoltaic and Solar Energy Association show that 2020 is a record year for the growth of the Brazilian photovoltaic industry, attracting investment of more than 13 billion reais (approximately US$2.32 billion) and creating more than 86,000 new jobs. Elbia Gannum, president of the Brazilian Wind Energy Association, said that the country's wind energy market has grown significantly, and wind power has accounted for 17% of the country's electricity generation. In the past 10 years, the installed capacity of wind power in Brazil has increased from less than 1 GW to 18 GW in early 2021. It is expected that the installed wind power capacity in 2024 is expected to increase to 28 GW or even higher.

In Colombia, green bonds have aroused widespread attention in the capital market. The Colombian government announced the issuance of a 20-year green bond worth 2 trillion pesos (approximately US$570 million) in the second half of this year to provide funds for renewable energy power generation, low-carbon transportation and other projects. This is Colombia's first issuance of green bonds. Analysis believes that this issuance of green bonds will become one of the important measures for Colombia's economic recovery. It will promote the green energy transition and respond to the economic dilemma caused by the new crown pneumonia epidemic.

Support policies continue to be introduced

In response to the adverse effects of the epidemic, many Latin American countries have continuously introduced and updated support policies for the green energy industry. In February of this year, Chile passed the "Energy Efficiency Law", stipulating that large enterprises must establish a corresponding energy management system and regularly report energy consumption to the Ministry of Energy. New houses must have energy efficiency labels. The public can clearly understand the energy efficiency of houses through the labels and provide a reference for house purchases. The law also encourages the promotion of electric vehicle applications. It is estimated that by 2030, Chile can save USD 15.2 billion and help reduce 28.6 million tons of carbon dioxide emissions.

The Brazilian Congress plans to introduce a bill to reduce or exempt certain imported production equipment and parts tariffs for green energy companies that meet the conditions. Brazil's National Bank for Economic and Social Development also promised to provide relevant companies with the most favorable long-term low-interest loans in the market. According to the Brazilian National Energy Agency, by 2035, the total investment in Brazil's power industry will exceed 30 billion U.S. dollars, of which 70% will be invested in renewable energy technologies such as solar photovoltaic, wind power, biomass energy, and ocean energy. It is estimated that by 2035, Brazil can have more than 800,000 sets of solar photovoltaic equipment with an installed capacity of more than 2,000 megawatts.

The Colombian government has formulated a "clean growth" plan to increase the total installed capacity of solar and wind energy from less than 50 MW in 2018 to 2500 MW in 2022. The Colombian government has proposed 27 strategic renewable energy and power transmission projects, including 9 wind energy, 5 solar energy, 3 geothermal energy and 1 hydrogen energy project, as well as 9 transmission lines, with a total investment of more than 16 trillion pesos (approximately equivalent). US$4.54 billion), hoping to bring more than 55,000 jobs to Colombia. In addition, with the advent of electric vehicles and the increase in consumption of natural gas vehicles, the country will achieve the goal of reducing the demand for liquid fuels, diesel and gasoline by 20% by 2050.

At present, 50% of Peru's electricity depends on hydropower, and new energy sources such as solar and wind power account for 5%. The Ministry of Energy and Mining of Peru pointed out that the country will invest more than US$3.3 billion to build 23 power stations with a total installed capacity of 2,045 megawatts. Among them, 22 are renewable energy projects, mainly hydropower, solar and wind power plants, accounting for 99.1% of the total installed capacity, and one is a traditional thermal power station, accounting for only 0.9% of the total installed capacity.

Prospects for industry development

According to the latest "Global Renewable Energy Outlook" report issued by the International Renewable Energy Agency, by 2050, the demand for renewable energy investment in Latin America and the Caribbean is estimated to be 45 billion US dollars per year, and every US dollar invested can bring 3-8 US dollars. Economic returns. Francisco La Carmela, Director-General of the International Renewable Energy Agency, said that from enhancing energy security, reducing system costs, to broadly creating jobs, improving public health, and promoting economic growth, all countries can benefit from increasing the proportion of renewable energy.

Alfonso Blanco, executive secretary of the Latin American Energy Organization, said that the energy sector can become one of the driving forces of economic recovery in Latin American countries. Blanco believes that the epidemic has caused countries in the region to re-examine their long-term development strategies. Accelerating the development of green energy can provide opportunities for Latin America to solve social inequality. Renewable energy can increase the utilization of clean technologies in industries such as industry, agriculture, manufacturing, and transportation. It is expected that by 2030, the region’s carbon emissions will be reduced by 21%, making efforts to reduce global emissions.

The International Renewable Energy Agency stated that Latin American countries have huge and untapped renewable energy potential and are very attractive investment destinations for renewable energy projects.

At present, Chinese companies are stepping up their efforts to participate in the construction of green energy industries in Latin America to provide assistance for the promotion of sustainable energy development in the region. In November last year, China State Power Investment Corporation (State Power Investment Corporation) Brazil and the Brazilian Electric Power Research Center signed a memorandum of understanding on integrated smart energy projects to intelligentize energy production, energy storage, energy supply, energy consumption and smart .The main line of management and service is to build an ecosystem of integrated energy solutions. "This memorandum will introduce new concepts and technologies to Brazil and help Brazil create a more competitive and creative environment."

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