Although wind power plant construction across Latin America is modest compared to more established markets, such as North America and Europe, the region's wind industry is taking off at a rapid pace, according to a new report from Navigant Research.
The firm says Latin America has become the hottest growth market for the wind energy industry at a time when growth rates in other markets, such as the U.S., are flat or declining due to a variety of policy and macroeconomic challenges. According to the report, annual wind power installations in Latin America will roughly double, in terms of capacity, over the next 10 years, growing from nearly 2.2 GW this year to 4.3 GW by 2022.
"Latin America is expected to account for at least 5.5 percent of the world's new wind power installations in 2013," says Feng Zhao, research director with Navigant Research. "With the strong political support of most governments and rapid economic growth fueling rising electricity demand, wind markets in the region are expected to exhibit double-digit compound annual growth rates through the next 10 years."
The latest 2013 wind power contract auction round in Brazil resulted in prices stabilizing at higher rates and the signing on of 1,505 MW of new wind capacity, according to the report. Navigant says this suggests that the unsustainable downward trend in prices bottomed out last year, and the Brazilian market appears to be poised for strong growth moving forward.
According to the report, Mexico brought online over 800 MW in 2012, and the market should surpass a cumulative 2 GW by the end of 2014.
However, Navigant notes that Mexico's 2012 wind capacity is only 2.5% of the country's generation total, which is low for a country with a target calling for 35% renewables by 2024. (For more on wind development in Mexico, click here.)