Latin America is setting the pace in clean energy, led by Brazil and Mexico. Renewables account for more than half of electricity generation in Latin America and the Caribbean – compared with a world average of about 22% – according to the International Energy Agency.
Brazil is one of the world’s leading producers of hydropower, while Mexico is a leader in geothermal power. Smaller countries in the region are also taking a lead. In Costa Rica, about 99% of the country’s electricity comes from renewable sources, while in Uruguay the proportion is close to 95%.
The Itaipu hydroelectric dam, on the border of Brazil and Paraguay, generated 89.5TWh of energy in 2015. Image: Deni Williams
At the same time, countries such as Chile, Brazil, Mexico and Argentina have adjusted their regulations to encourage alternative energy without having to offer subsidies. Some have held auctions for generation contracts purely for renewables.
Latin America’s renewable energy production is dominated by an abundance of hydropower, but there is strong growth potential for other sources of renewable energy. Wind and solar power are expected to account for about 37% of the region’s electricity generation by 2040, compared with current levels of about 4%, according to a report from Bloomberg New Energy Finance (BNEF).