Latin America paves the way for Cleantech

Soaring energy prices due to draught.

Raising fuel prices.

Strong opposition against investing in traditional energy sources.

These are some of the factors that bring uncertainty to the Latin-American energy markets. The electricity prices in Chile have increased by 40 % during the first months of 2014 and the trend seems to point to even higher prices later on this year. Other countries like Costa Rica witnesses how production costs get more expensive and exports become less competitive when electricity cost now doubles that of U.S. In most of these cases a deficit in hydroelectric generation will be covered by burning fuels.

None of the Latin-American countries, with the exception of Argentina, Mexico and Brazil, have nuclear power and hence are more vulnerable for fluctuations in electricity prices. Many times the lucrative extractive sector, typically mining, is located in areas with insufficient clean energy sources and therefore mostly diesel driven generators provide the needed electricity.

Uncertainty in future electricity supply as well as rising prices gives Clean tech a chance to play a bigger role in these emergent markets. There is no such thing as a one-fit-all solution in this vast region but a combination of solutions adapted to local conditions that will probably yield the best results. Photovoltaic in the deserts of Chile and Peru, wind power in Patagonia, biomass in Brazil and geothermal in Mexico are just some examples of already ongoing projects. According to Climatescope 2013 (a report produced by The Multilateral Investment Fund and Bloomberg) Brazil, Chile and Nicaragua top the list as the most attractive clean energy markets in Latin America and the Caribbean.

Despite some cultural and language barriers and a high degree of bureaucracy the future for Clean tech looks promising in a region with plenty of resources, favorable regulations, and multilateral initiatives that foster collaboration and investment.

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