Is Latin America the next renewable energy superpower?

With a landscape shaped by powerful, unusually consistent renewable resources, the Latin American region is, at least in part, defined by the raw materials from which to build a successful renewable energy market. In many countries across this region renewables are already a resounding success – Paraguay, for example, sources 100% of its energy from clean sources – but is it too soon to call the region a superpower?

This article explores the key challenges the market must confront to earn that title in practice – namely, how to enable a strong environment for investment across the board while accounting for the complexity of distributing clean power to population hubs across a varied landscape.

Brazil is an apt case study of this tension between resource potential and market realisation. The country has set a target to boost the volume of energy sourced from renewables to 60 GW by 2030 – a target influenced by the increasing electricity demands of an expanding middle-class population. However, while Brazil previously relied on hydroelectricity to meet a large proportion of its renewable energy needs, a spate of droughts has laid bare the flaw of relying on hydro as a core power source. The country must respond with a push for a more varied portfolio.

At present, however, Brazilian policymakers are the source of some mixed messages around renewables, with permitting challenges for solar as well as on- and offshore wind impacting the timelines of potentially transformative projects. Yet despite this, there is a clear opportunity developing for a new blend of renewable technologies in a geography that allows for projects at a whole new scale.

While this article presents a number of the issues standing in the way of this new energy vision becoming a reality across Latin America more broadly, in the meantime it will remain critical for asset owners and operators to ensure their renewable energy projects can perform as efficiently and consistently as possible; both to demonstrate operational best practice, but also to reiterate the financial benefits of investing in the region to an international energy market.

A fruitful but difficult landscape

Whilst Latin America’s unique geography is at the root of much of the regions great promise when it comes to renewables – for example, strong, unidirectional coastal winds are characteristic of Brazil and therefore perfect for offshore wind – the landscape also presents a few issues for energy generation.

Take the case study country, Brazil, as an example – the country is home to culturally and ecologically rich sites that must be protected. This, quite rightly, limits the options for siting onshore renewable energy projects – especially at the scale required to power the country’s growing cities. If it is difficult to construct new wind and solar energy farms, it is paramount that asset owners are fully informed when it comes to running each turbine or solar panel in such a way as to make the most of its permitted lifespan and generating (and financial) potential.

This is exactly the sort of data-based knowledge that Clir believes is essential to asset owners. A true understanding of performance generated by setting each asset in its geospatial and resource context can tell an owner whether underperformance is due to resource fluctuations or an overlooked fault. Crucially though, this level of asset understanding allows Clir to identify whether a turbine can be run harder than initially forecast.

Possessing a contextualised understanding of asset performance also allows the project owner to pinpoint when solar panels are impacted by shadowing or when turbine performance is being affected by turbulence caused by forestry in the surrounding environment. Clearly, this is vital information when both siting and maintaining a renewable energy project onshore in Latin America.

Proving investment potential

Naturally, the cycles of political and financial instability in some LATAM countries have had a less than positive influence on the growth of private investment in renewable energy to date. However, asset owners still have the power to encourage more private investment in the region, showing that the potential of their existing projects is being realised. Consistent high performance can provide confidence that the renewable energy infrastructure in the region will continue to provide a strong return on investment.

A detailed assessment of asset performance in its environmental context can indicate opportunities to markedly increase energy production for both solar and wind technologies. Minor errors such as sensor miscalibration are easily missed in the noise of resource fluctuation, but if these issues are not identified and remediated, they can cause a significant dent in production (and returns) over time.

By investing in a data-based understanding of project performance, asset owners are actually investing in certainty. The analysis of this data provides owners with, firstly, knowledge of what their assets are truly capable of beyond outdated design assumptions, and secondly, the actionable insights required to rectify any issues and optimise generation. Armed with this data, asset owners can guarantee maximum return on investment, and demonstrate the potency of this emerging market.

Managing the impacts of intermittency

Latin America’s geography includes great expanses of open space and peaks that are perfect sites for capturing the power of natural resources. However, prime sites for onshore wind or solar farms are often located far from population centres – a fact that presents an expensive challenge when it comes to transmitting vast, albeit intermittent, quantities of energy to where demand is highest.

Infrastructure instability can be managed through owners responding to demand and managing their assets accordingly. Clir is able to assist project owners by ensuring each asset can provide energy when needed, while also ensuring that it is derating correctly if the grid is overwhelmed and returning to full power after the fact.

Though many of the challenges discussed here are longstanding issues to be addressed by the energy sector globally, Latin America’s huge resource potential and the emerging nature of the market could see asset owners and investors active in the region best placed to address the impacts of these challenges smartly, quickly, and far more proactively than seen across many more mature markets to date.

Understanding, optimising, and harnessing each individual energy source in its specific context is key to this goal.

This, in turn, will allow Latin America to achieve its full renewable energy potential by making sure that each individual turbine, solar panel, and portfolio as a whole achieves its full potential – both when it comes to addressing the uncertainties of the now, and in turn, in shaping the future energy landscape.

Read the article online at: https://www.energyglobal.com/special-reports/23032021/is-latin-america-the-next-renewable-energy-superpower/