Wood Mackenzie Forecasts a Solar Revolution and 81% Renewable Dominance in Southern Cone’s Power Sector

In a groundbreaking analysis by Wood Mackenzie, it is predicted that solar energy will outpace wind in Argentina, Brazil, and Chile over the next decade, marking a significant shift in the region’s power landscape. The report anticipates the addition of 48 gigawatts (GW) of solar capacity, surpassing wind’s contribution of 31 GW through 2033. This surge is attributed to advancements in batteries and reduced solar costs.

Wood Mackenzie’s “Southern Cone Investment Horizon Outlook” highlights Brazil as a frontrunner, set to add an impressive 46 GW in the non-regulated market within the next decade. The growth is fueled by a flourishing free market expansion, but challenges such as increasing demand and developing transmission capacity are identified as potential obstacles.

Addressing grid congestion issues, Argentina incentivizes private sector involvement in new infrastructure, ensuring priority dispatch for power plants. Meanwhile, Brazil intensifies transmission auctions and invests in infrastructure, and Chile focuses on regulatory advancements for battery storage to tackle curtailment challenges.

As the region pivots towards renewable energy, the report foresees a decline in gas-to-power demand. Brazil and Bolivia look to boost gas demand through industrial projects, while Argentina faces macroeconomic uncertainties affecting investments. The evolving gas dynamics anticipate a shift from Bolivia balancing Brazil and Argentina to a future where Argentina and Chile integrate, Bolivia focuses on its internal market, and Brazil relies on domestic production and LNG offtake, contingent on robust infrastructure development.

Wood Mackenzie’s analysis underscores the transformative trajectory of the Southern Cone’s energy landscape, emphasizing the pivotal role of renewables and the imperative need for strategic gas infrastructure development.