Led by Brazil, Latin America is expected to reach 46 GW of total installed wind capacity by 2025, with a 12.6% compound annual growth rate of yearly installations, according to a new market study from IHS Emerging Energy Research.
Brazil will lead the region, with 31.6 GW installed by 2025, followed by Mexico, with 6.6 GW. Chile will also add significant wind power, boosted by the country's renewable portfolio standard, according to the ‘Latin America Wind Power Markets and Strategies: 2010-2025.’
Brazil's market size, which is expected to represent 69% of the total installed capacity in 2025 in Latin America, positions the country as a leader in the region and a relevant supply hub. Demand and local-content requirements are encouraging original equipment manufacturers to invest primarily in Brazil-based manufacturing of turbines 1.5 MW and larger.
According to the study, beyond turbine assembly, an even larger opportunity is opening up to develop Brazil's wind turbine component supply chain, with annual demand for more than 300 turbine units expected by 2011. Total investment in Latin America wind turbine markets will scale from just under $1 billion in 2009 to more than $2.2 billion by 2015.
‘With Latin America's large potential and limited installed capacity, developers are racing to secure market share in a single country, while those companies with more mature pipelines have initiated regional expansion,’ says IHS analyst Vincent Gautier, one of the study's authors. ‘This trend is dominated by international players, while local firms presently find their home markets large enough.’
European wind players are poised to dominate wind power development and ownership in Latin America in the near term, leveraging their experience and financial resources. Iberdrola Renovables was the first player to develop a significant presence regionally, with operational projects in Brazil and Mexico.
Other international developers, such as Acciona Energia, are now following suit. IMPSA Wind is currently the only Latin American developer with regional ambition, but local industrial players and independent power producers are moving to challenge these foreign entrants by the latter half of the decade, according to the study.
Mexico has the potential to challenge Brazil's market leadership, but reduced political support suggests the overall market will stagnate until 2020, according to the study. Chile will peak at 280 MW installed in 2024, before dropping 55% due to the achievement of its 10% renewable portfolio standard target.
SOURCE: IHS Emerging Energy Research