Date: August 9
South America, with its vast expanse and geographic diversity, has witnessed significant growth in wind projects in recent years. This trend, far from slowing down, is expected to continue and strengthen in the next decade. According to Wood Mackenzie’s “South America Onshore Power Outlook” report, the region’s total wind market is projected to add 41.2 GW of onshore projects through 2032, representing an impressive 122% growth.
This projected growth will lead South America to have a cumulative capacity of 75 GW by 2032, compared to the almost 34 GW registered at the end of 2022. Brazil, with its vast territory and favorable policies, will lead this growth, contributing 23 GW, which represents 56% of total growth. It is followed by Chile, which has proven to be a promising market for renewable energy.
Colombia emerges as the third main market, contributing almost 8% of the total outlook. However, for Colombia to reach its potential, it is essential to invest in transmission infrastructure. The wind-rich region of La Guajira faces grid constraints that limit the possibilities of increasing capacity. Despite having awarded close to 1.6 GW of wind projects, connection to the grid remains a challenge due to delays in grid expansion.
Beyond specific projects, the growth is attributed to the dynamics of the relevant markets. Historically, regulated auctions have been the main engine to boost renewable energy in the region. However, this trend is changing. Large buyers from the commercial and industrial sectors are migrating to the unregulated market in search of favorable power purchase agreements, such as PPAs. These contracts will significantly boost construction in South America, especially in mature markets such as Argentina, Brazil, Chile and Peru.
In the long term, green hydrogen emerges as a development opportunity, especially in Brazil and Chile. These countries are expected to add 1.5 GW of capacity through 2032 to support green hydrogen production. Although multi-gigawatt projects have been announced, most are in an early stage of development and are expected to scale up after 2030.
However, the path to growth is not without its challenges. Wind power faces competition from solar PV, which benefits from a broader geographic distribution and falling costs. Additionally, grid limitations present challenges for wind developers throughout South America.
In conclusion, the future of wind energy in South America is bright. With the right support, the region is well positioned to harness its vast resources and lead the transition to a more sustainable energy future.
Source: Energía Estratégica
