Mexico and Central America spearheading renewables investment: new BNEF data

12 August 2014

LONDON: New analysis from Bloomberg New Energy Finance (BNEF) reveals a strong market for clean energy in Mexico and Central America.

The detailed appraisal notes that in just the first six months of this year, Mexico invested US$1.3 billion in clean energy, a significant improvement on 2013 where total investment for the full year stood at US$1.6 billion. If this sustainability interest is maintained, 2014’s figures could outstrip the previous record investment levels of US$2.4 billion set in 2010, the analysts assert.

In fact, when Mexico’s projects are combined with those in Central America, new wind power capacity in the region looks likely to hit 1 gigwatt (GW) by the end of 2014, beating the previous 2012 record of 757 megawatts (MW).

Solar power is predicted to increase slightly, with 193 MW of installation due by year end. But the renewable technology is set for further expansion in subsequent years, with BNEF forecasting 355 MW and 456 MW for 2015 and 2016 respectively.

A number of countries in the region have changed their policy landscapes to facilitate larger shares of renewables. Both Mexico and Honduras are undertaking power sector reforms which allow a greater role for private-sector generation.

In addition, tenders in El Salvador, Panama and Guatemala offer concrete opportunities for developers working on wind and solar energy projects.

Development of clean energy supplies in lieu of expensive fossil fuels makes economic sense, according to Yayoi Sekine, Latin America analyst at Bloomberg New Energy Finance: “One of the striking things about this region is the very high exposure to expensive oil- and diesel-based generation. This makes up 20% of installed capacity in Mexico and 42% in Central America.

“Yet these countries have unusually good wind, solar, geothermal, and hydro-electric power resources. Using these to meet much of the additional electricity demand in coming years, and replacing that costly oil and diesel power, makes sense. It is becoming a key plank in the region’s energy policies.”

By Alana Ryan

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