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Hydro-electricity projects set to balloon in Latin America

projects like this
are set to balloon in
Latin America
Quito, Ecuador — ESI-AFRICA.COM — 14 June 2011 – Hydro-electricity projects are set to balloon in Latin America and the region is expected to invest hugely in the technology in coming years, followed by biomass and wind power, according to industry observers.

“We are only using 22% of our hydro-energy potential,” says Eduardo Noboa, renewable energy coordinator at the Latin American energy organisation Olade, based here. “This is the region’s main resource for clean energy generation and where most renewable investments will concentrate to generate hydroelectricity in the short and medium term.”

As of 2010, 57% of electricity in Latin America and the Caribbean stemmed from hydro sources while another 40% came from thermo-electric power plants using fossil fuels and natural gas. Of the remainder, 2% comes from nuclear stations and 1% from wind, solar and geothermal plants.

According to Noboa, 94% of the region’s electricity potential could stem from hydro-energy, while the other 6% could come from alternative renewable sources

“Of course, new technologies could change future investment trends but as it is now hydro-energy output could rise five-fold by 2020,” Noboa predicts. “Bio-energy production could soar 14-fold, largely driven by a plethora of planned ethanol projects, while wind power could see capacity rise eight-fold,” he adds.

Hydro-energy projects have high public acceptance and make use of the region’s large river and waterway resources. Brazil is the powerhouse of hydroelectric generation with 80GW of installed capacity and is expected to lead the investment frenzy in this conventional renewable resource.

Observers predict that Argentina, Mexico and Costa Rica will follow closely behind with several projects on the drawing board. Other countries expected to lift capacity are Uruguay, Colombia and Venezuela, also mainly supported by hydro resources. Mexico generates 80% of its electricity from thermal stations while Argentina and Chile also draw more than half of their power needs from thermal plants. Cuba is mostly a thermal-based energy economy.

The biofuels race, meanwhile, is mostly making headlines in Colombia and Argentina, which have several large-scale projects up their sleeves. Brazil is the leader with a massive ethanol and flex-fuel car industry but Argentina continues to make gains in efforts to become the region’s bio-diesel hub. Government officials recently announced the nation will churn out 3.2Mt of biodiesel and export US$2.2 billion worth of it this year.

Meanwhile Mexico has made great strides in wind power but fresh criticism of the government’s "poor compensation rates" is expected to put a lid on new projects in the near to medium term.

Geothermal development is forecast to take place in Mexico and Central America, though South America also has some interesting potential, according to observers.

The region must also improve and expand its regulatory framework to include all renewables. Many countries have drafted a legislative and incentives programme to support certain technologies but none have a single, cohesive framework to govern all renewables.