South America Could Become Next Frontier For Offshore Wind

South America, for long the forgotten continent in solar and wind energy until the early 2020s, is playing catch up finally. Even as large solar projects have been the preserve of Brazil and Chile until now, when it comes to wind, it is offshore wind that is promising some major changes.

The largest country in the continent, Brazil, might be the next frontier for renewable technology, boasting a technical offshore wind energy potential of more than 1200GW. According to a study published by the World Bank, it could install up to 96 GW of generation capacity by 2050 with an offshore wind strategy.

The study estimates that Brazil has 1228 GW of offshore wind potential that can be taken advantage of. This includes 480GW through fixed bottom (water depth<70m) and 748GW using floating wind technology (at water depths between 70 and 1000m).

Experts have laid out three possible scenarios, in which even in the worst-case scenario, Brazil will have the opportunity to install 16 GW by 2050, representing 3% of the country’s generation capacity.

Under the moderate scenario, the country could build up to 32GW of installed offshore wind capacity by 2050. The optimistic scenario predicts 96 GW of offshore farms by 2050 if a clear energy strategy is adopted along with important investments in infrastructure.

Under the optimistic scenario, offshore wind would be able to support Brazil’s green hydrogen goals, boost economic growth and potentially create up to 516000 full-time equivalent jobs. The plan would also contribute approximately 154 billion euros to the economy.

Taking Brazil’s potential into account, Wood Mackenzie estimates that cumulative onshore wind capacity in South America will double by the next decade, reaching 79 GW.  According to the report, 2023 was a record year with 5.9 GW of onshore wind power in South America, accelerated primarily by the rush in Brazil to secure expiring subsidies. Brazil alone will contribute to 54% of regional growth over the decade. Chile and Argentina will follow, with all three countries expected to leverage PPAs to support wind development.

“As the recent policy-driven renewable energy overbuild slows in the two main markets, Brazil and Chile, South America will face limited growth in the medium term,” said Karys Prado, Senior Research Analyst, Energy and Renewables by Wood Mackenzie.

According to the report, limited transmission infrastructure will continue to be a challenge for onshore wind power in the region, which faces fierce competition from cheap solar PV, which benefits from dispersed locations, allowing it to outpace the requirement for essential grid upgrades which are still pending completion.

 

By Yash Singh