1H 2021 Latin America Market Outlook

Penulis：0 Waktu：2021-04-21 09:19:16.0 Tampilan Halaman：312

Covid-19 has exacted a heavy toll on the economies of Latin America. For its part, the clean energy sector in the region emerged from a harrowing year intact, though not unscathed. New wind and solar capacity additions dropped sharply, though pandemic-related project delays proved milder than the Mexican government’s onslaught on its local renewables industry. After plunging, clean energy investment made a strong recovery in the second half to deliver surprisingly healthy full-year results. Against the backdrop of uncertain recoveries under way across Latin America, this represents a much-needed shot in the arm and ensures a large pipeline of new capacity build through 2023. The surge in investment, together with the resumption of auctions in Brazil, Chile and Colombia, makes it increasingly likely that a rebound in clean energy markets will outpace broader macroeconomic recovery in 2021.

By the Numbers
● $16.4bn
New clean energy investment in Latin America in 2020
● 5.2GW
Latin America 2020 wind and solar capacity additions
● 12%
Average share of wind and solar generation in region’s major markets in 2020

Latin America wind and solar generation share, by country

Source: BloombergNEFNote: ONS, CENACE, CNE, CAMMESA, BloombergNEF

● New investment in clean energy in Latin America slipped in 2020 but still proved resilient. Total activity of $16.4 billion was down 17% from a record 2019, but the market picked up strongly in 2H after a dismal start to the year.
● Brazil and Chile buoyed the overall results, attracting more than three-quarters of the funds deployed regionally. Brazil took a record $9 billion thanks a surging small-scale PV market. Chile’s $4.5 billion was its second best ever. Both will remain key markets in 2021.
● In contrast, new wind and solar capacity additions fell sharply. Total utility-scale build of 5.2GW was down 40% and hit its lowest level since 2016. The first year-on-year decline since 2015 was driven by collapse of activity in Mexico.
● Strong momentum from recent investments closed in Brazil and Chile should produce a rebound in utility-scale capacity growth in 2021, with pent-up activity and auction contract deadlines delivering record, double-digit additions of around 11GW for the region. Assuming a sustained recovery from Covid-19, Latin America will build 30GW of new wind/solar through 2023.
● Brazil’s booming small-scale PV market grew with 3.3GW installed in 2020 and attracted $3 billion, nearly a fifth of total regional clean energy investment. However, a potential scale-back in the country’s net metering program could undercut growth in 2021.
● In Brazil, Chile and Mexico, wind/solar accounted for more than 10% of generation in 2020 with Argentina not far behind at 8%. As recently as 2018, only Chile had exceeded 10% and in 2016 none had. Effective policy married to strong wind and solar resources and new investment has accelerated energy transition in the region.
● In all Latin American markets covered by BloombergNEF onshore wind or solar PV is the cheapest source of new bulk electricity, and in some markets such as Brazil, investing in new onshore wind is more cost-effective than operating already amortized fossil fuel power plants.

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