Why is Latin America So Attractive for Green Energy?

One of the greatest challenges we face today is tackling climate change. To succeed in this shared mission, we need to work together as a global society and rethink the way we produce energy. This is where green energy comes into play, and Latin America stands out as a shining example.

Green energy refers to the production of electricity using natural and renewable sources, as opposed to non-renewable ones, which have dominated human development for centuries. Non-renewable sources include oil, coal, and natural gas, to name a few.

While non-renewable energy sources release large amounts of pollutants and have harmful environmental effects, renewable energy does the opposite. Among the most widely known forms are solar, wind, and hydroelectric power—all of which play a significant role in Latin America.

In our Latin America’s Green Energy Report 2024, we explore how renewable energy is already an essential part of the energy mix in many countries across the region. But what exactly makes Latin America such a hotspot for green energy?

A Wealth of Natural Resources

There’s a popular saying in Brazil that “God is Brazilian,” referring to the country’s abundance of natural resources and incredible biodiversity. But truth be told, you could say “God is Latin American,” because these characteristics are shared across the continent.

Solar Power

Latin America’s immense natural diversity provides endless opportunities to tap into green energy for its growing population. For instance, the tropical climate covering much of the continent means that vast areas receive high levels of sunlight year-round.

This is especially true in regions with little cloud cover, which boosts the amount of solar radiation reaching the ground and, in turn, the potential for solar energy. Key examples include the Atacama Desert in Chile, the Salta and Jujuy provinces in northern Argentina, Mexico’s Baja California, and Brazil’s northeastern states like Bahia, Ceará, Pernambuco, and Piauí.

Many of these areas are also flat, making them ideal for large-scale solar farms—further solidifying their potential as solar energy hubs.

Wind Power

Wind energy also has enormous potential in Latin America. This type of green energy relies on strong winds, and areas with low population density are particularly suitable for wind farms.

Why? Setting up wind farms is a large-scale project that can significantly affect nearby communities. Therefore, regions with fewer residents face fewer obstacles to implementation.

Luckily, the windiest areas in Latin America also happen to be some of the least populated, such as the southern Atlantic coastline of South America. Uruguay, for example, enjoys consistent winds throughout the year, as does the expansive Argentine Patagonia. Both areas are sparsely populated, making them perfect for wind energy projects.

Uruguay is a global leader in this field, with nearly 40% of its energy mix coming from wind power—one of the highest rates per capita in the world.

Hydroelectric Energy

Latin America’s tropical regions are home to some of the world’s largest and most important river basins. This makes the continent ideal for hydroelectric power generation.

Brazil, for instance, is a hydroelectric powerhouse. Nearly 80% of the country’s electricity comes from hydroelectric plants, including major facilities like Itaipu, Três Gargantas, and São Simão.

Paraguay is another standout, sharing the Itaipu Dam with Brazil and the Yacyretá Dam with Argentina.

Other countries that capitalise on their river systems for hydroelectric energy include Colombia, Costa Rica, Peru, and Venezuela.

Low Costs

Thanks to the abundance of natural resources, implementing green energy projects in Latin America requires fewer structural changes compared to other regions. The necessary materials and conditions are already in place, making infrastructure installation and operational costs significantly lower.

Government Support

Many governments in Latin America actively encourage green energy adoption by offering policies like tax exemptions and subsidies.

Beyond the economic and environmental benefits, the region’s Indigenous communities provide a cultural incentive for sustainability. These communities have a deep connection to nature and serve as advocates for greener policies.

In Brazil, the PROINFA programme specifically supports renewable energy initiatives, similar to programmes in countries like Argentina, Chile, and Mexico. These governments are heavily investing in green energy infrastructure and working hard to meet global sustainability goals.