With a population of over 600 million growing at 1% per year, and its GDP more than doubled between 1990 and 2015, the demand for electricity in the LAC region is expected to double by 2030. Still, 15 million people in the region lack access to electricity.
Latin America is today an encouraging low-carbon region with over 200 GW or 56% of its power generation capacity from renewables. The region’s greenhouse gas emissions from energy use historically have been low largely due to the relatively clean electricity mix of the region, with large share of hydropower. Almost all renewable electricity comes from hydropower and biomass, with solar, geothermal and wind making an increasing contribution. While the region has the lowest carbon emissions from power generation that comes mainly from hydrological and biomass resources. The region has recently made great strides in developing solar, geothermal and wind its other renewable energy sources (over 10 GW of installed capacity).
Latin America has seen significant investment in renewable energy in recent years. Total investment for power generation has been estimated close to USD 120 billion between 2010 and 2015 including USD 38 billion for large hydropower. The IRENA analysis highlighted the recent cost reduction trends for renewable power generation technologies and the historic levels of competitiveness that have been reached. With recent cost reductions, solar and onshore wind can now provide electricity competitively, without financial support, in an increasing number of Latin American countries. For instance, the recent auctions in Mexico, Peru and Chile produced highly competitive prices, with the solar PV awarded in Peru at record-low US$48.0/MWh.
Rapid cost reductions, maturing technologies, the consolidation of renewable energy policies and the vast untapped potentials for renewables in the region offer an unprecedented opportunity to further develop the renewable energy market in the region.