Martin Vogt, CEO of MPC Energy Solutions, provides a market outlook for 2022 on Latin America and the Caribbean.
As the world moves toward the collective goal of decarbonisation, Latin America is in a leading position to pave the way to reach a cleaner, low-carbon future. The vast region is rich in green energy resources and, currently, 61% of its power generation capacity is from renewables. Additionally, over 26% of the region’s primary energy supply comes from green energy, which is one of the world’s largest rates of renewables.
Latin America has ambitious goals to boost its resilience and further transition away from fossil fuels and into cleaner sources of energy. Recently, the Latin American Energy Organisation (OLADE) and the International Renewable Energy Agency (IRENA) agreed to partner to bolster policy plans, foment low-carbon investment flows through various initiatives and ease the pursuit of the region’s commitment to attaining 70% renewables in power generation by 2030. MPC Energy Solutions is very well positioned in Latin America to help deliver this goal, with more than 250 MW in developments and construction projects in the region.
Colombia is a particularly attractive market, as it is experiencing strong momentum in renewables growth, with solar and wind projects having the biggest potential. This is largely due to several key accomplishments this year, including the congressional approval of the Energy Transition Bill and the country’s third renewables auction, whereby the government called for tenders for the installation of clean energy projects. The Colombian government also aims to increase the installed capacity for the generation of renewable energy from about 250 MW this year to 2500 MW in 2022.
Addressing climate change is a top priority among a growing number of nations around the world, but the Caribbean region is among the most impacted by climate change and therefore has major ambitions when it comes to the energy transition. Currently, around 59% of electricity in Latin America and the Caribbean is sourced from renewable energy, and there is strong political support across Caribbean countries for further development and adoption of renewables.
In 2019, Small Island Developing States (SIDS) made a collective commitment to reach 100% renewable energy targets by 2030 and net zero emissions by 2050. However, at the UN Climate Change Conference COP26, in Glasgow, SIDS voiced the need for stronger support from private and public funders to increase investments in the clean energy sector. The government of Barbados, in particular, urged leaders of developed countries to deliver on promised funding for island nations.
St Kitts and Nevis is another country in the Caribbean region that is committed to implementing more resilient measures to diversify energy generation in the coming years. At COP26, Saint Kitts and Nevis presented an extraordinary plan to reduce CO2 emissions by 61% by switching to 100% renewable energy by 2030. Additionally, it is expected that new tenders will enter the market of the Cayman Islands, as a recent auction scheme is seeking to incite an investment wave in solar and wind power production over the next decade to facilitate the country’s energy transition and to meet its target of 70% of renewable energy by 2037. Jamaica is also diversifying its energy sector with an ambitious plan to add around 1600 MW of generation capacity over the next two decades. The ongoing commitments made by countries across the region, paired with price instability seen in legacy fuel resources such as the recent rise of the price of LNG and subsequent global inflation, further prove that countries can benefit from a transition to green energy sources. By freeing themselves from the vulnerabilities of fossil fuels, countries can become more resilient and guarantee continued and sustainable development. The increasing adoption of renewables also benefits investors, as the industry faces a long-term positive outlook, prompted by growing global demand, diminishing costs of renewable power generation and further development of government incentives worldwide.
Read the article online at: https://www.energyglobal.com/special-reports/05012022/a-cleaner-future-in-latin-america-and-the-caribbean/