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Latin America Report: Uruguay, Future Home of the World's Cheapest Solar Energy

Uruguay is about to offer contracts to buy power from 200 megawatts of solar farms at $90/MWh, which is barely half the cost of power in China and Germany.

President Jose Mujica is expected to sign a decree requiring national power utility Administración Nacional de Usinas y Transmisiones Eléctricas to buy electricity from projects at that rate. Developers will have four months to submit proposals, with contracts handed out on a first-come-first-served basis.

The question then becomes, who will respond? "Most countries where solar is being built offer higher rates than that, or extra tax incentives, as in the U.S.," said Bloomberg New Energy Finance analyst Jenny Chase. Nevertheless, Ramon Mendez, director of energy at the Ministry of Industry, Energy and Mining, claims several prospective bidders have indicated they can sell at that price. If this round doesn't pan out "we just wait another couple of years for equipment prices to come down and we try again."

Uruguay is already at the forefront of offering rock-bottom renewable energy prices. Hydroelectric plants produce about 80 percent of the nation's electricity, with costs averaging $80/MWh, according to Mendez. A 2011 auction saw 17 wind project developers offering prices as low as $63/MWh for new capacity.


Mexico Expects Solar to Surge: Mexico expects installed capacity to surge to 1.5 GW by 2020 — compared with just 10 MW today— at a cost of about 31 billion pesos (US $2.46 billion), according to Claudia Hernandez, the Ministry of Energy's director of renewables. Wind capacity is seen increasing at a comparatively mild tenfold pace to about 12 GW over the same period.

Brazil Wind-Farm Rule on Power Cables May Scuttle Projects: A new decree from Agencia Nacional de Energia Eletrica will require wind energy companies in Brazil to shoulder costs for transmission lines, potentially adding 10 percent to their project costs. That could reduce by half the field of project developers in the next government auction slated for May, while other firms will narrow their focus to only projects that utilize existing infrastructure. The measures are intended to avoid delays in grid-connecting completed wind farms, as happened to utility Cia. Hidro Eletrica do Sao Francisco which missed a deadline for 26 wind farms.

Why the need for updated transmission line T&D rules? Partly because developers are keen to take advantage of one of the hottest energy markets in the region. Data from Brazil's wind power generation association Abeeolica indicates newer wind farms produced around 50 percent of their installed capacity last year. Mean wind power generation in 2012 averaged 56.26 MW (MWa), with peak production of 771 MWa registered in October.

Solar Developers Pitch Multi-Megawatt Solar Projects in Brazil: Representatives for Vensolbras presented their plans for a 200-MW project in São João do Piauí, with total investments of about 1.2 billion real. The first two stages would bring online 1 MW and 5 MW installed capacity, respectively, with the third phase ramping the remainder. Meanwhile, a trio of companies — Real Solar, Enerbra, and Bacilieri — have shared proposals with the State Secretariat for Economic Development (Sedec) for solar projects in the Rio Grande do Norte region, totaling approximately BRL 782 million in investments: a 240-MW project by Real Solar, 1 MW from Enerbra, and a 200-MW deployment for Bacilieri.

Solar America contracts for Guadalajara power stations: Solar America's "Solar Power Station" and solar lighting products will be incorporated at Los Conejos, a planned community of 700 homes in Tonola, a suburb of Guadalajara. Company chairman/CEO Robert Bludorn hopes the "modest" project will serve as a demo for developers and builders in the region.

Reservoir Filling Begins at Brazil's Simplicio Hydroelectric Complex: Brazil's 334-MW Simplicio hydropower complex reservoir is now underway, and the plant on the border of Rio de Janeiro and Minas Gerais should begin generating power in April, according to state-run power company Eletrobras Furnas.

Soccer Stadiums in Brazil going solar: A 1 MWp solar power plant at the Arena Pernambuco soccer stadium is slated to be completed in June, with all energy dedicated to the stadium. Most of the BRL 10 million investment comes from Neoenergia and Odebrecht Energia; design and installation of the plant is overseen by Gehrlicher Solar Ecoluz do Brasil, a joint venture between the Brazilian Ecoluz Participations and Germanys Gehrlicher Solar AG. The project is part of an R&D program of the Neoenergia Group, involving Celpe (state of Pernambuco), Coelba (state of Bahia) and Cosern (state of Rio Grande do Norte).

Real Solar, meanwhile, is building a solar PV installation on the Stadium Farache Maria Lamas in Natal, in northeastern Brazil. No size or capacity was listed, but the project will cost about $1 million (half through donations). The report noted that the project will halve home team ABC Futebol's energy bill, which currently takes up half its monthly US $9000/month budget.

Ecuador Commissions 1-MW Solar Plant: A 1-MW power plant built by Zigor Corporaciõn and Valsolar Ecuador in Paragachi, Imbabura province, is the first of its kind to be connected to the Ecuadorian Grid, according to its owners. They say it will "save millions of dollars in fuel and energy imports from other countries."

Fronius establishes footprint in Brazil: Fronius International has opened a solar electronics subsidiary in Diadema, Sao Paulo, joining other domestic businesses in welding and battery charging technologies. The company's focus in the Brazilian market will be on small-scale residential (up to 5 kW) and medium-sized systems (up to 1 MW) to take advantage of incentives.


Chile Launches Tender for CSP Plant: The Chilean government has launched a tender to build the nation's first energy-generating concentrated solar power (CSP) plant, backed by a $20 million subsidy and up to $350 million in "soft loans" from banks and lenders in Europe and the U.S. The project will be at least 10 MW in size, and connected to either the Center or Great North grids. Proposals must be received within four months; results of the evaluation will be released by the end of July.

IFC Invests Big in Latin American Clean Energy: International Finance Corp. (IFC) and the IFC African, Latin American and Caribbean Fund (IFC ALAC Fund) are investing $100 million in InterEnergy Holdings (IEH) to develop cleaner and more efficient energy sources in the Caribbean and expand operations in Latin America. Initial targets are to develop new projects and diversify energy sources in the Dominican Republic, Haiti, and Hispaniola.

At the same time, the IFC also has issued a $1 billion "green bond" to support its climate-friendly projects in developing countries, which the group says is its largest green bond issue ever; to date the IFC has issued about $2.2 billion in such bonds. "The private sector can play a leading role in addressing climate change," noted Jingdong Hua, IFC VP and treasurer.

Guatemala Prepping 50-MW Solar Project: Guatemala is about to begin construction on what a local report says is the largest solar park in Central America: a 50-MW project by Grupo Ortiz, with estimated $140 million in investment. The company has yet to pick a site for the project, which would take a year and a half to build and come online in August 2014; municipalities in the running include Chimaltenango, La Gomera, Tiquisate, and the city of Antigua Guatemala.


How to Follow Renewable Energies into Emerging Markets: Large-scale deployment of renewable energy is expanding to emerging markets. Over the next five years, 44 percent of new capacity in wind energy, 35 percent of new solar PV capacity, and 23 percent for concentrated solar power (CSP) will be deployed in emerging markets, points out Romeu Gaspar. His article explores several suggestions to develop and implement a sensible market entry strategy for emerging markets, which promise additional revenue balanced with risks in increased costs and diluted market focus.


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Jan. 31-Feb. 19, 2013 Latin America Report: Mexico Just Scratching the Surface of Solar Demand

Jan. 18-29, 2013 Latin America Report: Mapping the Solar Energy Landscape

Jan. 1-17, 2013 Latin America Report : Canadian-Led Consortium Taps Solar Power from Ecuador

Lead image: Flag of Uruguay, via Shutterstock

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