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South America is poised to become the world leader in renewable energy production

Beside the Pan-American Highway, almost 600km (375 miles) north of Santiago, Chile’s capital, lies El Romero, the largest solar-energy plant in Latin America and among the dozen biggest in the world.

Workers install solar panels at El Romero.

Its 775,000 grey solar panels spread out across the undulating plateau of the Atacama desert as if they were sheets of water. Built at a cost of $343m by Acciona Energía, a Spanish company, last month El Romero started to be hooked up to the national grid. By April it should reach full strength, generating 196MW of electricity—enough to power a city of a million people. A third of its output will be bought directly by Google’s Chilean subsidiary, and the rest fed into the grid.

El Romero is evidence of an energy revolution that is spreading across Latin America. The region already leads the world in clean energy. For almost seven months this year, Costa Rica ran purely on renewable power. Uruguay has come close to that, too. In 2014, the latest year for which comparable data exist, Latin America as a whole produced 53% of its electricity from renewable sources, compared with a world average of 22%, according to the International Energy Agency.

The region’s impressive clean-energy production is boosted by an abundance of hydropower. Big dams are increasingly controversial: in recent years, Brazil and Chile have blocked hydro-electric projects in environmentally sensitive areas.

Sopladora hydro plant, southeast of Cuenca.

On the other hand, Ecuador will complete the last of eight large hydropower plants in 2017 and will become the region’s leader in renewable energy generation, producing an excess of electricity that can be sold to neighboring countries. According to estimates, in 2018 Ecuador will produce more than 95% of its electricity by hydro.

Alternative energy sources, such as wind, solar and geothermal, still only account for around 2% of Latin America’s output, compared with a world average of 6%. Nonetheless, there are several reasons to think this share will grow quickly. Wind projects in Ecuador, Chile, and Argentina are beginning to supply power to small communities.

One is the region’s natural endowment. El Romero, for example, enjoys 320 days of sunshine a year. On the horizon, amid the Andean mountaintops, sit two astronomical observatories, testament to the clarity of the air. Much of Latin America is well suited to solar and wind power; volcanic Central America and the Caribbean have geothermal potential.

Wind turbines in Loja Province, Ecuador

Worldwide, technological progress and economies of scale have slashed the cost of green energy. Once built, solar plants are much cheaper than thermal power stations to operate. “El Romero is a symbol that alternative energy is no longer alternative. It’s the most commercial now,” says José Ignacio Escobar, Acciona Energía’s boss in Chile.

Countries such as Chile, Brazil, Mexico and recently Argentina have tweaked their regulations to encourage alternative energy without having to offer subsidies. Some have held auctions for generation contracts purely for renewables, points out Lisa Viscidi, an energy specialist at the Inter-American Dialogue, a think-tank in Washington. Chile’s regulatory framework is trusted by investors; it has encouraged renewable generation by auctioning smaller contracts. It has set a target of producing 20% of its electricity from non-hydro renewable sources by 2025. Argentina and Mexico have similar goals.

There are two pitfalls. In Chile, the penalty for failing to fulfil contracts is low, which means the winners of auctions may pull out later if they do not raise financing. Moreover, both solar and wind power are intermittent. That means they need to be paired with baseload generation. In many Latin American countries this tends to come from natural gas, which emits less carbon than oil, though in Chile it is coal. Greater efforts to connect grids between countries might reduce the need for fossil fuels as a backup.

Renewable energy offers big benefits to the region. Chile is short of domestic fossil fuels. As a result of its latest auction of energy contracts, by 2025 prices should be a third lower than they are now, reckons Andrés Velasco, a former finance minister. By promoting renewables, Latin America is helping to curb carbon emissions globally—though it also needs to do more to stop deforestation and encourage public transport.

That matters for political as well as altruistic reasons. Latin Americans worry more than anybody else about climate change, according to polling by the Pew Research Centre, a think-tank. They have good reason. The region is prone to natural disasters and extreme weather. To take one current example, Bolivia last month imposed water rationing in La Paz, the capital. The three reservoirs that serve the city are almost dry. Lake Poopó, once a large freshwater body in the altiplano, has all but dried up, seemingly permanently.

Outside Chile and Colombia, coal deposits are scarce in Latin America. That is one reason why industrialisation came late to the region. In the 21st century, it may turn out to be an advantage in helping Latin America move swiftly to a post-carbon economy.

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Credit: The Economist, www.economist.com

  • AAD

    hydroelectric dams are not sustainable/renewable/ecological:
    “Of course, despite the inexpensive and emissions-free power, many environmentalists consider hydroelectric dams to be man-made abominations that prevent salmon and other fish from swimming upstream, divert otherwise natural riparian settings, and fundamentally change the character of surrounding ecosystems. Green groups including American Rivers, Defenders of Wildlife, Earthjustice, the Endangered Species Coalition, Friends of the Earth, National Wildlife Federation and the Sierra Club are pushing the federal government to mandate the removal of four dams along the Snake River in Washington State that help the region have the lowest power-related carbon footprint in the country. The dams have decimated once teeming salmon runs, and upstream forest ecosystems have suffered accordingly.”- Business Ethics Magazine.
    especially now that rivers a drying up, 95% electricity coming from dams does not make sense.
    WIND, SOLAR, WAVE, TIDAL,GEOTHERMAL THE SANE ALTERNATIVES.

    • StillWatching

      If forced to choose between salmon and humans, I’ll choose humans every time and have the humans eat all the salmon they can, while they can, because it is rich in Omega 3 fatty acids.

      Are we still protecting Snail Darters? Every night I worry about how awful my life would be without those little fish.

      • AAD

        and how long have you had this problem? 😉

    • lorenzo

      What you are saying is absolutely right, looking at it from a USA perspective. This is Ecuador. Ecuadorians have traditionally used their rivers as dumping grounds. Although I’m happy to see that awareness for conserving water quality is growing, most rivers right now are a polluted mess. You’ll find trout in the pristine headwaters around the Cajas, but down below where the dams are being built, there’s not much migrating aquatic life that exists anyway in such a polluted environment. Definitely no salmon. Not even a Snail Darter.

      So we have a choice. Use the “dead” river to create clean energy, or change the Ecuadorian mindset and create clean rivers by eliminating point and non-point source pollution, establishing riparian areas, etc.

      I’ll guarantee that even the Tranvia will be up and running before this second option can be accomplished.

      • AAD

        perhaps we missed my punchline: “especially now that rivers a drying up, 95% electricity coming from dams does not make sense.” drying up means no hydro-power or snails or salmon or humans. manipulating rivers will expedite their demise. even if we were choosing btwn pollution and complete anilation of a river, new punchline: I CHOOSE EVERY LIVING THING, INCLUDING HUMANS. cleaning up the rivers will cost a fraction of building dams. china is the dam promoter. no pun intended.

        • lorenzo

          Once the reservoir fills behind a dam, the river will flow the same amount of water as before the dam was built, assuming additional water is not released ahead of a storm.

          I would be interested to know the reason(s) that studies suggest rivers are drying up. Diverting water for agricultural purposes is the only reason that I can think of. Global warming may cause less rainfall in some areas, but won’t it also increase rainfall in other areas?

          • AAD

            “cleaning up the rivers will cost a fraction of building dams. china is the dam promoter. [because they build them, here in Ecuador] ”
            and YOUR point is……??

          • lorenzo

            My point is that I agree with almost everything that you say,(except that I question the part about rivers drying up). I also understand Ecuadorian culture and it’s priorities.

            Cleaning up the rivers is the right thing to do, but it will be a very long and gradual process here in Ecuador. That’s reality. Another reality is that Ecuador needs to produce clean energy for itself and as a revenue from selling it to other countries. China has the technical expertise to build these hydroelectric dams and Ecuador is paying for it to successfully invest in our future.

            I agree that dams will damage the ecosystem of a river. My argument is that at least on the Jubones river, the ecosystem is already damaged. We are not going to make it any worse by constructing a dam.

            Maybe someday in the future when alternative forms of clean energy become more feasible, we can remove the dams and restore our rivers.

          • AAD

            1. Contradictions: Cleaning up the rivers the right thing to do; already damaged, so lets kill it for revenue. clean energy; dams do damage ecosystems.
            2. Fallacy: Ecuadorian culture and priorities equal to destroying nature for profit. that is a loose-loose proposition. (extensive conversation needed here,the one Ecuadorian officials needed to have, before building 8 dams.)
            3. it’s here now, that “someday in the future”, where we must make the correct choice now. that is how we got to the point of not having that future. its called bad faith.
            4. you seem to be in the industry? or is it government? (rhetorical)
            5. our points are clear now. Thank you.

    • Jason Faulkner

      There are no salmon runs in Ecuador. Our rivers go from 10,000 feet + in the Andes to sea level in the Pacific or the Amazon basin in runs measured in tens of miles. The rivers are practically vertical. Nothing migrates up 100+ vertical waterfalls and that is the common characteristic of Andean rivers. The hydro projects are located in the mountains, not the coastal plains or Amazon basin. All energy options have environmental impacts. Hydro is the most environmentally responsible option for our geography.

      • lorenzo

        I’m only familiar with the Minas-San Francisco hydro plant on the Jubones river. I pass by it almost every week on my way to Machala. The river has a fairly consistent grade for many kilometers. I’m sure that if a migrating species existed in the chocolate soup, it would have no problem migrating.

        I was once indirectly involved with a dam removal in New York because it interfered with the migration of a threatened mussel.

  • I had the privilege of attending “Energy Breakthroughs: A Glimpse into the Future” at Energy Policy Institute at the University of Chicago before moving from US to Ecuador, June 2016. Photovoltaic is projected to provide more than 90% of energy supply, as it continues to grow, once we transition to a sustainable energy economy by 2050. (Start 24 minutes into video of this event.) A crucial step along the path is informing the public what will be necessary to manage climate change. Another is encouraging the single (major) political party in the world to “about face” and create policy that those who elected them want. See > http://tinyurl.com/hulzuns I am presently informing more than 400 US news professionals and persons of influence, hoping they will inform the public, and hoping that US elected representatives will consider what wise governance requires.