By: Melanie Diaz, Research Associate at the Council on Hemispheric Affairs
In the face of rising global temperatures, glacial retreat, and ocean acidification, sustainable development of renewable resources has become more important than ever before. The U.S. government’s National Aeronautics and Space Administration (NASA) continues to report that within the past 12 years the globe has endured ten of the warmest years on record, and sea levels have risen an astounding 17 centimeters (or 6 and a half inches) within the past century.[i] However, recent advancements in solar energy could potentially lead to a solution that would feature the role of Latin American countries. According to GTM Research, a division of Greentech Media, the solar photovoltaic (PV) market in Latin America grew 370 percent in 2014, due to 625 megawatts (MW) worth of installations developed throughout the region during the year.[ii] In fact, with its 169 percent increase in solar energy between 2012 and 2014, Latin America is the “fastest-growing solar market in history.”[iii] This rate even surpasses the entire European solar market growth rate of 60 percent between 2007 and 2011.[iv]
With 500 million people living in Latin America, energy requirements are at an all-time high. In the face of global warming, the region’s countries have begun to look toward solar energy to improve energy security and environmental health. This turn toward solar energy is a good option for Latin American countries considering that a majority of the region falls along the equatorial line, giving it access to a great deal of the world’s sunlight.[v] In 2013, GTM Research had predicted that the Latin American solar market could grow 66 percent annually. But with the 370 percent increase in 2014, it seems that the area can harvest even more solar energy than even experts previously expected. While countries like Chile, Mexico, and Brazil have become regional leaders in solar energy, they are not the only crucial players. Smaller countries, such as Uruguay, Peru, and Costa Rica, have also boasted notable rates in renewable energy.[vi] It is important to note, however, that Latin American countries will not be able to solely rely on solar energy just yet. In August 2012, some organizations that report on affairs in the Western Hemisphere, predicted that renewable energy would comprise less than five percent of the globe’s energy mix in 2030, with solar energy making up only a small portion of this small percentage.[vii] This means that Latin American countries will still need to invest in building more solar power plants if they wish to meet growing energy needs.[viii]
But Why Solar Energy?
Solar energy is perhaps the most expeditious solution to help Latin America in its quest for energy security. The production of solar energy does not release the toxic pollutants or dangerous emissions that fuel global warming. Even the most intense of the major problems associated with solar energy are solvable.
A primary issue with solar power is that solar plants require large amounts of land space, and this can potentially hinder a nation’s agricultural industries. The Union of Concerned Scientists (UCS), however, aptly proposes that large solar plants be built in areas with poor soil, in order to limit their negative impact on Latin America’s agricultural business and capitalize on their cooperate advantage.[ix] Furthermore, small solar power installations could be built on limited commercial and/or private building sites, further limiting the negative effect of solar energy plants on agricultural lands.[x]
A second major concern is the large quantity of water necessary for the cooling system process at solar plants. For example, in concentrating solar thermal plants (CSP’s), up to 650 gallons of water can be used to produce merely one megawatt-hour of electricity, resulting in low efficiency rates.[xi] One solution to this issue, however, is dry-cooling, a technique that uses air instead of water to lower plant temperatures. This process can reduce the amount of water used by CSP’s by up to 90 percent, according to the National Renewable Energy Laboratory (NREL).[xii]
But other environmental concerns with potential solar energy usage can present difficulties. The greenhouse gases nitrogen trifluoride and sulfur hexafluoride are produced during the manufacturing of solar panels. These gases have an even greater negative impact on global climate change than carbon dioxide does.[xiii] Another serious issue with solar power is that access to sunlight is intermittent, since the sun is not always accessible. And the possible solution of making batteries for solar energy storage can be a costly venture. The mining of the metals needed to make batteries can also cause damage to the environment. An upside, however, is that there is a heavy correlation between the world’s energy needs and sunlight, meaning sunlight is strongest at the same time of day when energy is most consumed.[xiv] While there may be manufacturing and storage issues associated with solar power, the repercussions of other renewable energy sources can have far greater consequences.
Hydroelectricity is presently Latin America’s most important renewable energy source, but it has even more negative environmental effects than does solar energy. Blocking rivers can be environmentally damaging and can force populations into displacement. Additionally, hydro power plants make for poor water quality in the reservoirs constructed, especially because of stagnant water flow.[xv] Latin American countries that have the most invested in hydroelectricity, most notably Brazil and Ecuador, have learned the high environmental costs of doing so. [xvi]
In 2007, Brazil’s hydro power plants were producing about 74 thousand MW of electricity, but this output represented only about a quarter of what the nation could have potentially derived from this source.[xvii] Unfortunately, realizing Brazil’s full 2007 hydroelectric potential was only possible if dams and power plants were constructed in the Amazon basin.[xviii] The question of whether or not to exploit one of the most sensitive and diverse ecosystems in the world, with full knowledge of the difficulty in successfully sustaining hydro power plants, became paramount in the energy debate. The facilities require constant upgrades and modifications as water floods onto surrounding lowlands and greatly reduces the efficiency of the hydro plants over time. But despite this lack of effective sustainability, Brazil continued to launch and expand projects in the Amazon that threatened both riverside populations and the environment. By 2007, installments of hydro power plants in Brazil had led to the compulsory displacement of 200,000 riverside families and 34,000 square-kilometers (13, 128 square miles) of land flooding.[xix]
Similar issues have developed in Ecuador with the installment of hydro power plants. In 2010, Ecuadorian President Rafael Correa (2007-present) signed a contract with Chinese representatives to begin the Coca-Codo Sinclair hydroelectric project. With completion scheduled for 2016, the hydro power plant is expected to have produced 3,000 direct jobs and 15,000 indirect jobs, while also cutting annual carbon dioxide emissions by about 4.5 million metric tons.[xx] These promised benefits, however, do in fact come at the price of environmental damage. Since the hydroelectric project will be built just 19 kilometers (12 miles) upstream from the San Rafael falls, the largest in all of Ecuador at 480 feet tall, it could dry out the falls as their water is redirected to the Coca-Codo plant for electricity generation.[xxi] In 2008, Ecuador became the first country to dedicate a Constitutional rights to environmental protection. However, it the country’s efforts to discover a reliable and renewable energy source, Ecuador has violated its revolutionary protectionism. With its hydroelectric plants, the country has threatened the biospheres of the Andes Mountains and the Amazon which surround the San Rafael falls.[xxii] To environmentalists, the negative impact of the Coca-Codo Sinclair plant vastly outweigh the positive ones. Ecuador will never be able to recover its environmental wonders that will be destroyed by this hydroelectric project.
Although Latin American countries have relied upon hydroelectricity as a means for renewable energy, it may be time for a switch to solar energy. The environmental challenges of effectively sustaining hydro power plants are too great. Renewable energy should not come at a greater cost to global ecosystems and indigenous populations. And although the creation of solar power plants have negative byproducts, its benefits arguably outweigh those associated with hydroelectricity.
The movement towards solar energy is sweeping throughout Latin America. For example, the University of Panama, working with Greenwood Energy, a company that answers to growing energy needs throughout the Americas, has drawn plans to develop a 44 milliwatt (mW) project using a shared solar power purchase agreement (PPA).[xxiii] Meanwhile, Peru had built up over 60 MW worth of installations by 2012, and was planning two additional projects that would provide between 20 and 36 MW.[xxiv] Amidst trends of renewable energy, however, Chile, Mexico, and Brazil have stood out as primary leaders in solar energy production.
In 2014, out of the three leading solar countries, Chile made the most developments, with three-fourths of the total of Latin America’s solar market increase (370 percent) powered by its facilities.[xxv] Within the fourth quarter of 2014 alone, Chile installed two times the amount of solar energy projects than all of Latin America’s solar PV total from 2013.[xxvi] One reason for Chile’s great success in solar energy lies in the fact that the country enjoys some of the world’s highest direct radiance, making Chile one of the best long-term markets for solar energy investments. And more recently, Chile has been looking at a carbon tax in order to discourage the use of fossil fuels.[xxvii]
By 2014, Mexico had the second largest growth rate of Latin America’s solar energy generation.[xxviii] Mexico’s Federal Commission of Electricity (Comisión federal de electricidad or CFE), a state-owned electricity provider, launched two pilot projects: one 1 MW plant and one 5 MW plant.[xxix] Meanwhile the government has set a 2024 target for the country’s renewable energy supply at 35 percent, while additionally considering the imposition of a carbon tax.[xxx] These two government actions have incentivized increased solar power plant installations and investments. In 2013, GTM Research had already reported that between the solar power created by Mexico and Chile alone, Latin America would see a 66 percent annual growth in solar energy production through 2017.
In third place for Latin America’s largest growing solar energy production, is Brazil. In 2012, the nation’s government implemented legislation needed to create net metering terms on energy to encourage its solar market. By 2014 each kilowatt-hour (kWh) of solar energy sold at a retail rate of 15 cents (USD).[xxxi] Brazil is the largest renewable energy market in Latin America when it comes to both capacity and investment, but the nation’s energy market is plagued by interconnection issues. Still, solar energy developments and installations continue with the hope that interconnection issues be solved before the completion of the projects.
Encouraging More Growth in Latin America
Latin American countries have illustrated their potential in the solar energy market in recent years. With external aid, however, the region could further enhance its progress in reducing global warming emissions. Not only could foreign investment benefit Latin American countries by providing them with a secure energy source, but it would help the Western Hemisphere and the globe by reducing carbon emissions and slowing climate change. External aid can come in two forms: international alliances, which focus on environmental protection, and private company investments.
Alliances could enable actors in the Western Hemisphere to finally address issues of environmental protection. In June 2014, the U.S. Secretary of State, John Kerry, issued a statement at the North American Energy Summit, honoring the role of the United States, Mexico and Canada in the Montreal Protocol, an international treaty intended to reduce nations’ use of substances that deplete the ozone layer.[xxxii] These three North American nations have greatly contributed to the progress of renewable energy, with their Climate and Clean Air Coalition (CCAC) serving as another example of their efforts to reduce pollutants. Between September 2013 and August 2014, the CCAC undertook 11 different initiatives that focus on a diversity of topics from agriculture to public health. If more Latin American countries were to establish environmental alliance to combat the issue of climate change, then perhaps renewable energy efforts can progress further. If such alliances were to be made, however, it would be wise for the hemisphere’s nations to focus on increasing solar energy developments in particular, especially since Latin America has exhibited promising growth rates in the field within recent years, and holds potential for further expansion.
Additionally, private company investments can partake in the expansion of the Latin American solar market. Many US-based companies, which commonly use Chinese manufacturers, are part of the reason why so many Latin American countries were able to increase their solar market potential in 2014. For example, the energy company, First Solar, helped to install 141 MW-worth of panels in Chile’s San Andres solar plant, the largest solar plant in Latin America.[xxxiii] Meanwhile, the U.S. Bureau of Economic and Business Affairs encouraged U.S. exporters of clean energy technology to invest in Chile’s solar market in 2014.[xxxiv] Such private company investments have many advantages: companies receive economic returns from their solar energy investments, Latin American countries are able to solidify a secure energy source, and the earth’s environment benefits from decreased global warming emissions.
Regarding external aid in Latin America’s solar markets, it is important to respect geo-political boundaries and relations. In 2013, Brazilian President Dilma Rousseff stated her wish to designate a large portion of the country’s economic development toward renewable energy, with solar energy included.[xxxv] Although alliances and investments from external nations in the Western Hemisphere and beyond may help further stimulate the solar market in Latin America, they should advance with respect for the economic interests of the host nations. In light of solar energy improvements, and in hopes for more constructive, inter-hemispheric aid in the solar sector, Latin America’s progress for secure energy and the world’s fight against climate change is looking bright.
By: Melanie Diaz, Research Associate at the Council on Hemispheric Affairs
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[i] “Climate change: How do we know?” National Aeronautics and Space Administration, Accessed 9 February 2015, http://climate.nasa.gov/evidence/.
[ii] Joshua Hill, “Latin America Solar Market Grew 370% in 2014,” Clean Technica, 29 January 2015, Accessed 9 February 2015, https://cleantechnica.com/2015/01/29/latin-america-solar-market-grew-370-2014/.
[iii] “Record-Breaking Solar Growth in Latin America Presents Massive Opportunities,” Seeking Alpha, 30 January 2015, Accessed 9 February 2015, http://seekingalpha.com/article/2869956-record-breaking-solar-growth-in-latin-america-presents-massive-opportunities?page=2.
[vi] Camilo Patrignani, “Lessons in Solar Development for the Latin American Market,” RenewableEnergyWorld.com, 4 July 2014, Accessed 9 February 2015, http://www.renewableenergyworld.com/rea/news/article/2014/07/lessons-in-solar-development-for-the-latin-american-market.
[vii] Roger Tissot, “Latin America’s Energy Future,” Inter-American Dialogue, August 2012, Accessed 4 March 2015, http://www.thedialogue.org/PublicationFiles/Tissotpaperweb.pdf.
[viii] “Renewables 2014: Global Status Report,”REN21, 2014, Accessed 4 March 2015, http://www.ren21.net/portals/0/documents/resources/gsr/2014/gsr2014_full%20report_low%20res.pdf.
[ix] “Environmental Impacts of Solar Power,” Union of Concerned Scientists, 5 March 2013, Accessed 20 February 2015, http://www.ucsusa.org/clean_energy/our-energy-choices/renewable-energy/environmental-impacts-solar-power.html#references.
[xii] “Energy Analysis: Renewable Electricity Futures Study,” National Renewable Energy Laboratory, Accessed 20 February 2015, http://www.nrel.gov/analysis/re_futures/.
[xiii] Mathias Maehlum, “Solar Energy Pros and Cons,” Energy Informative, 12 May 2014, Accessed 2 March 2015, http://energyinformative.org/solar-energy-pros-and-cons/#associated-with-pollution.
[xv] Célio Bermann, “Impasses and controversies of hydroelectricity,” Scientific Electronic Library Online, Accessed 20 February 2015, http://www.scielo.br/pdf/ea/v21n59/en_a10v2159.pdf.
[xx] “Coca Codo Sinclair Hydroelectric Project, Ecuador,” power-technology.com, Accessed 20 February 2015, http://www.power-technology.com/projects/coca-codo-sinclair-hydroelectric-project/.
[xxi] “Ecuador’s most spectacular waterfall threatened by Chinese-funded hydroelectric project,” International Rivers, Accessed 9 February 2015, http://www.internationalrivers.org/resources/ecuador-s-most-spectacular-waterfall-threatened-by-chinese-funded-hydroelectric-project.
[xxiii] Patrignani, “Lessons in Solar Development…”
[xxiv] Andrew Krulewitz, “Si Se Puede! Latin American Solar Markets Poised for Growth,” Greentechsolar, 24 January 2013, Accessed 9 February 2015, http://www.greentechmedia.com/articles/read/Si-Se-Puede-Latin-American-Solar-Markets-Poised-for-Growth.
[xxv] Hill, “Latin America Solar Market…”
[xxvii] Patrignani, “Lessons in Solar Development…” ; Krulewitz, “Si Se Puede!”
[xxviii] Hill, “Latin America Solar Market…”
[xxix] Krulewitz, “Si Se Puede!”
[xxx] Patrignani, “Lessons in Solar Development…”
[xxxii] John Kerry, “Statement for the North American Energy Summit,” U.S. Department of State, 12 June 2014, Accessed 2 March 2015, http://www.state.gov/secretary/remarks/2014/06/227451.htm.
[xxxiii] “Record-Breaking Solar Growth…” Seeking Alpha.
[xxxiv] Bureau of Economic and Business Affairs, “Direct Line: Clean Energy Opportunities in Chile,” U.S. Department of State, 13 May 2014, Accessed 3 March 2015, http://www.state.gov/e/eb/directline/2014/225849.htm.
[xxxv] “Solar Energy in Latin America,” University of Pittsburgh, 17 January 2013, Accessed 9 February 2015, http://www.panoramas.pitt.edu/content/solar-energy-latin-america.