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REN21 10 Years Report

30 (REC) mechanism can also be considered as milestones. The establishment of renewable energy targets in 2012 and the 2010 launch of the Solar Mission programme can also be considered as landmark initiatives of the past decade. n MAIN CHALLENGES FOR RENEWABLES The perception of renewables as being mainly small scale and filling predominantly rural electrification needs hinders the expansion of this sector towards utility-scale projects. Power transmission and grid integration capacities are still missing; rapid policy changes as well as a lack of coordination between Union and State Governments represent major obstacles to sus- tainable growth in the renewable energy industry. Limited access to financing for renewable energy projects and the bad financial health of India’s power utilities, which are mostly publically held, are further key barriers, as they affect investor confidence and motivation. vii) For the purposes of this publication, Latin America is defined as those countries located in North, Central and South America: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, and Venezuela. LATIN AMERICA n GENERAL OVERVIEW The situation of Latin America’s energy industry is as diverse as the 17 countries across the continent.vii However over the past decade the region’s countries have increasingly changed their legislation to be more renewable energy-friendly, particularly in countries with poor, low or no fossil fuel reserves and/or in those countries with a rapidly increasing power demand. Recently improved market conditions for renewable electricity generation and biofuels accelerated market developments of these renew- able energy sectors across Central America. The implementa- tion of renewable energy projects however is still a challenge due to a lack of bankable renewable energy schemes in most of the region’s countries. The lack of public acceptance for large scale renewable energy – mainly hydro – is also an issue in some coun- tries and has sparked controversy among indigenous people and non-governmental organisations. n MAIN DRIVERS FOR RENEWABLES Rapidly growing demand for transport fuel and electricity has opened up business opportunities for renewable energy projects both in the field of biofuels and renewable electricity. In addition to large hydropower, onshore wind projects have grown the most rapidly over the past decade followed by solar energy. While locally available renewable energy sources allow for increased security of supply and a level of independence from world mar- ket fossil fuel prices, the deployment rate for renewables in Latin America is currently lower than the increase in demand and expansion of fossil fuels. n RENEWABLE ENERGY POLICY DEVELOPMENT With the rapid expansion of renewable electricity projects— especially onshore wind—the infrastructure for power transmis- sion has increasingly become a bottleneck. Faster and more carefully planned expansion of power grids is needed in order to bring more renewable energy generation projects online as is illustrated by current demand out-pacing the expansion rate of both power line and power projects. Presently Brazil, Chile, Mexico, and Uruguay are the leading renewable energy champions within Latin America. A highlight of the past decade has been the introduction of renewable auctions in Brazil, resulting in highly competitive electricity prices from wind. The past decade has also seen Brazil expanding its biofuel, large hydro and—since 2009—onshore wind sectors. One of the first renewable energy policies of Brazil was the Program of Incentives for Alternative Electricity Sources (PROFINA), a feed- in-tariff (FIT)-like scheme developed in 2002, which in 2009, evolved into a renewable energy auction system. n DEPLOYMENT OF RENEWABLES The past ten years have seen a steep increase in solar PV proj- ect development in the region; several large scale systems have been completed and others are under development. According to some early forecasts over 2 GW of solar PV could be installed across the region in the near future. Concentrating solar power (CSP) has been slower to take hold in the region. A 14 MW hybrid solar/gas plant was commissioned in Mexico in 2011 with an anticipated operational date of late 2014. Chile ventured into the field of CSP in 2013 with the launch of a competitive tender for a 50 – 100MW plant.

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