Latin America is already a leader in clean energy. Costa Rica ran for 7 months on clean energy alone last year and Uruguay came close to that. In 2014, the latest year for which comparable data exist, Latin America as a whole produced 53% of its electricity from renewable sources, compared with a world average of 22%, according to the International Energy Agency.
Chile, Brazil, Mexico, and Argentina have all changed their policies to encourage renewable energy without offering subsidies. Chile’s regulatory framework is trusted by investors; it has encouraged renewable generation by auctioning smaller contracts. It has set a target of producing 20% of its electricity from non-hydro renewable sources by 2025. Argentina and Mexico have similar goals.
Renewable energy offers big benefits to the region. Chile is short of domestic fossil fuels. As a result of its latest auction of energy contracts, by 2025 prices should be a third lower than they are now, reckons Andrés Velasco, a former finance minister.
