UNESCO SCIENCE REPORT

Latin America
Renewable energy could have a bright future
By early 2014, at least 19 Latin American countries had
renewable energy policies and at least 14 had adopted
relevant targets, mostly concerning electricity generation.
Uruguay aims to generate 90% of its electricity from
renewable sources by 2015. Despite having an average
electrification rate of almost 95%, one of the highest among
developing regions, access to energy remains a challenge: an
estimated 24 million people living mainly in rural and remote
areas still lack access to electricity in Latin America.
Most Latin American countries have adopted regulatory
policies and fiscal incentives (Table 7.5) to drive the
deployment of renewable energy. The use of public
competitive bidding has gained momentum in recent years,
with Brazil, El Salvador, Peru and Uruguay all issuing tenders in
2013 for more than 6.6 GW of renewable electric capacity. The
more clement environment for renewable sources of energy is
attracting new national and international investors.
The Brazilian government has nevertheless cut back its own
commitment to energy research from 2.1% (2000) to 0.3%
(2012). Renewable energy has been the primary victim of
these cuts, including the bioethanol industry, as public
investment has increasingly turned towards deep-sea oil and
gas exploration off Brazil’s southeast coast (Chapter 8).
The manufacture of ‘green’ technologies such as wind turbines
is spreading across the region. However, differences in electricity
market structures and regulations have so far hampered
efforts to integrate regional electricity markets and the lack of
transmission infrastructure has delayed some projects. The main
obstacle is the impossibility of compensating for fluctuations in
the supply of renewable energy from one country to another.
Nevertheless, the region is demonstrating unprecedented growth,
with strong opportunities for further expansion. In 2014, Brazil
ranked second worldwide for its hydropower capacity (89 GW)
and biodiesel/ethanol fuel production, fifth for its solar water
heating capacity (6.7 GW) and tenth for wind power (5.9 GW).
Mexico is the world’s fourth-biggest producer of geothermal
power (1 GW). Both Chile and Mexico have boosted their own
capacity in wind and solar energy and Uruguay has raised wind
capacity per capita more than any other country. Other innovative
applications are spreading, such as solar food-dryers in Mexico
and Peru to process fruits and coffee. Long-term incentives
for industry and technological development will be needed to
guarantee that these schemes are implemented fully.
Strong growth in ICT usage...
The region uses about 5% of the world’s public cloud services,
less than its share of global GDP (8.3% in 2013, see Table 1.1).
Nevertheless, estimated annual growth of 26.4% means that
Table 7.5: Existing regulatory policies and fiscal incentives in Latin America for renewable energy, 2015
Regulatory policies
Fiscal incentives and public financing
Countries
Feed-in tariff/
premium payment
Electric utility quota
obligation/ Renewable
portfolio standards
Net metering
Biofuels obligation/
mandate
Heat obligation/
mandate
Tendering
Capital subsidy, grant
or rebate
Investment or tax
production credits
Reduction in sales,
energy, carbon, VAT or
other taxes
Energy production
payment
Public investment,
loans or grants
Argentina l l l l ✚ ✚ ✚ ✚ ✚
Brazil l l l l ✚ ✚ ✚
Chile l l l ✚ ✚ ✚ ✚
Colombia l l ✚ ✚ ✚
Costa Rica l l l l ✚
Dominican Rep. l l l ✚ ✚ ✚ ✚
Ecuador l l l ✚ ✚
El Salvador l ✚ ✚ ✚ ✚
Guatemala l l l ✚ ✚
Honduras l l l ✚ ✚
Mexico l l ✚ ✚
Nicaragua l ✚
Panama l l l l ✚ ✚ ✚
Paraguay l ✚
Peru l l l l ✚ ✚
Uruguay l l l l l ✚ ✚ ✚ ✚
Chapter 7
Note: Data are unavailable for Bolivia, Cuba and Venezuela. VAT stands for value-added tax.
Source: REN21 (2015) Renewables 2015: Global Status Report, pp. 99–101. Renewable Energy Policy Network for the 21st Century: Paris
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