South America is one of the leading renewable energy-producing regions in the world, with a total installed capacity of 221.09 GW as of 2019. The South America renewable energy market is expected to grow at a CAGR of more than 6.1% in the forecast period of 2020-2025. A significant part of South America’s renewable energy is generated by hydropower facilities in countries such as Brazil and Venezuela, but its importance is slowly declining in favor of non-hydro renewable energy sources. Wind and solar are the other top contributors to the region’s renewable energy. Factors such as government policies and efforts to meet the rising power demand using renewable energy sources are expected to be significant contributors to the growth of the market. With the commitment of the government to obtain maximum energy from renewable and to reduce carbon emissions, the share of renewable is expected to grow significantly and are driving the renewable energy market further. On the other hand, lack of suitable transmission infrastructure and the use of other conventional energy are a few restraining factors for the South America renewable energy market.

  • Solar energy in South America is expected to have significant growth in the market as South America is trying to generate more share of their energy needs from renewable source like solar energy during the forecast period.
  • In 2019, South America has set a regional goal of reaching at least 70% of renewable energy in electricity in by 2030. The target involves reaching a total installed capacity of 312 GW of renewables capacity. In addition, investments in renewable energy are increasingly flowing into the emerging markets globally, whereby a significant portion is flowing into South America. Among that Brazil and Chile ranks amongst the top renewable energy markets in terms of investment, which in turn, likely to provide opportunities for growth in the market in the coming future.
  • Brazil is expected to dominate in the South America renewable energy market during the forecast period, owing to the upcoming projects and supportive government policies.



Key Market Trends

Solar Energy is Expected to Witness Significant Growth

  • South America witnessed a significant jump in its total installed solar capacity, which went up to 6.46 GW in 2019 from 0.9 GW in 2015. Brazil and Chile are the major contributors to the region’s solar capacity increase.
  • The solar energy market in Brazil is on the rise due to the increasing demand for electricity. Furthermore, the falling costs of solar power modules coupled with the government initiatives to increase renewable shares in the total energy mix, are driving the solar power market in the country.
  • South America’s solar energy capacity alone is expected to grow by a factor of 40 by 2050 to more than 280 GW due to an abundant resource endowment and strong enabling policies.
  • Brazil holds 2.48 GW of solar installed capacity in 2019. Whereas, Argentina produces a small amount of solar energy holding installed capacity of 0.44 GW in 2019. In Chile, the installed solar capacity was 2.64 GW in 2019.
  • In August 2019, Italian energy giant Enel, through its subsidiary Enel Green Power Chile, began construction of the new 382 MW Campos del Sol solar plant in the Atacama region in Chile and the solar plant is expected to begin operations in 2020.Therefore, in total solar energy is expected to have significant growth in the market during the forecast period.



Brazil is Expected to Dominate in the market

  • With a total installed capacity of 141.93 GW in 2019, Brazil is the top renewable energy-producing country in South America. The country generates more than 76% of its renewable energy from hydropower facilities. Its total hydropower capacity was 109.09 GW in 2019.
  • The country is home to some of the world’s largest hydropower facilities that include the 14 GW Itaipu hydroelectric project, which it jointly owns with Paraguay, and the Belo Monte hydropower plant, which is estimated to have cost USD 18.5 billion and becomes fully operational in 2020.
  • Brazil has also led to the growth of wind energy in South America over the past decade. The country’s total installed wind energy capacity was 15.36 GW in 2019, accounting for 74.34% of the region’s total capacity
  • Solar power in the country has also witnessed significant growth, with the capacity increasing to 2.48 GW in 2019. Bioenergy is also a major contributor to Brazil’s total renewable energy capacity. The country’s total capacity for this power form was 14.9 GW in 2019.
  • With upcoming and under construction renewable energy projects in Brazil is expected to dominate in the market during the forecast period.



Competitive Landscape

The South America renewable energy market is fragmented. Some of the major companies include Enel Green Power S.p.A., Iberdrola S.A., Aes gener sa, Vestas Wind Systems A/S, and Electricite de France SA.

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