Onshore wind capacity to double in Latin America in next 10 years

The report shows that 2023 was a record year with 5.9 GW of onshore wind additions in Latin America, helped by a rush in Brazil to secure expiring wheeling fee subsidies.  

Despite limited power demand visibility, Brazil maintains its lead as largest market in the region. The country alone will contribute 54% of the total regional growth, adding 21.5 GW by 2033, with commercial and industrial (C&I) power purchase agreements (PPAs) contributing 87% of capacity growth due to free market expansion. As coal phases out in Chile, 6.2 GW will come online, owing 60% to C&I PPAs as auction projects still connect. Argentina will add 4.5 GW, as the C&I scheme ‘Mater’ continues to support overcoming financial hurdles, the report says.  

‘As the recent policy-driven renewables overbuild slows in the top two markets, Brazil and Chile, South America will face limited growth in the medium term. Going forward, market recovery will rely on grid upgrades that help overcome solar competition, as well as power demand boosts, such as green hydrogen opportunities,’ Kárys Prado, Senior Research Analyst, Power and Renewables at Wood Mackenzie, says.

According to the report, limited transmission infrastructure will remain a challenge for onshore wind in the region, facing fierce competition with cheap solar PV which benefits from dispersed locations to overcome essential grid upgrades still pending completion. A lack of demand visibility and policy-driven oversupply in Brazil and Chile, further downsides the medium term.

‘One of the critical drivers for the region is the free market. Large off takers pursuing decarbonisation goals and negotiable contracting conditions will remain essential for onshore wind expansion as markets mature in Argentina, Brazil, Chile and Peru,’ Prado adds.

‘Colombia and Ecuador will still depend on the regulated market and its centralised auctions to underpin development. With state utilities in Bolivia, Guyana and Uruguay also expected to continue playing a crucial role in promoting onshore wind projects. Overall, a clear supply and demand policy is essential to unlocking the upside in South America, from power mix diversification to green hydrogen,’ Prado concludes.