Mexico and Central America are resourceful areas – renewable resources like wind, solar, geothermal and hydropower plentifully exist. Bloomberg New Energy Finance (BNEF) indicates in a new report that Mexico and Central America could emerge as clean powerhouses and drive more clean energy investment.
In the first half of 2014, investment in Mexico’s clean energy reached US$1.3 billion, compared to US$1.6 billion in the whole 2013. If activity continues at the same rate in 1H14, the total investment in 2014 could surpass the previous high of US$2.4 billion in 2010. BNEF accordingly forecasts a more vivid activity in wind and solar investment in the next two years. Likewise, clean energy investment in 1H14 was US$317 million in Central American countries include Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama. Although the amount of investment was shorter than 2013’s full-year total of US$1 billion, investment in wind, solar and geothermal are stronger than in Mexico, representing a positive outlook toward the region’s renewable developments.
BNEF analyzes that Mexico and Central America are likely to install more than 1GW of wind power capacity this year. Solar power installation may only see 193MW in 2014, but the figure is likely to leap to 355MW in 2015 and 456MW in 2016.
“These countries have unusually good wind, solar, geothermal, and hydro-electric power resources,” said Yayoi Sekine, Latin America analyst at Bloomberg New Energy Finance. “Using these to meet much of the additional electricity demand in coming years, and replacing that costly oil and diesel power, makes sense. It is becoming a key plank in the region’s energy policies.”
Michel Di Capua, head of Americas analysis for BNEF, notes that Mexican and Central American energy policies are encouraging investment in renewables like wind, solar and geothermal amidst Mexico’s continual investment in gas-fired generation and drought in certain Central American countries. The regions are facing reformation of power generations, and BNEF sees opportunities in wind and solar developments specifically.