Amidst the debate on the future developments of climate change and the need to reach net-zero emissions within the next couple of decades, the global energy transition from fossil fuels to renewables has found itself the center of attention. Renewable sources – which are defined as resources that can be naturally renewed within a human lifetime – include solar, wind, marine, biomass, hydro, and geothermal energy. Due to its vast geography and abundant natural resources, Latin America has the potential of becoming a major player in the sector. In 2022, the
neared 315 gigawatts, a growth of some 75 percent in comparison to a decade earlier.
A decade of progress in renewable capacity
Renewable resources, in particular hydropower, have historically been at the core of Latin America’s energy matrix. For example, the Itaipu Dam, on the border between Brazil and Paraguay – the
world’s second largest hydroelectricity dam, based on capacity – was inaugurated in 1984. Almost forty years later,
Latin America’s hydropower capacity stood at some 200 gigawatts, representing around two-thirds of the region’s renewable capacity in 2022. In line with global trends, however, the past decade saw a focus shift, with solar and wind power in the spotlight. In turn,
Latin America’s wind power capacity grew over six-fold since 2013. Meanwhile, its
solar photovoltaic capacity grew exponentially in the past ten years, reaching roughly 46 gigawatts in 2022.
Will potential become reality?
Despite the growth of the past years, most Latin American countries still exhibit a considerable opportunity for development when it comes to renewable energy sources. Renewables still accounted for just over 12 percent of the
primary energy supply in Mexico in 2021. In Argentina, they made up an average of 13.9 percent of the country's
energy generation in 2022. In addition, countries like Brazil and Paraguay – which hold some of the region’s highest shares of renewables in their domestic energy supply – heavily rely on large hydropower plants. Yet, the promotion of large hydropower as a renewable energy source finds itself under dispute due to the high social and environmental impacts caused by dam construction. As a result, in the age of solar and wind, Latin American countries like Brazil, Chile, and Argentina remain among the
most attractive for renewable energy investments.
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