Renewable energy (RE) investments have increased dramatically in recent years with developing countries now leading the charge towards an economy based on alternative energy, accounting for a record 63% of global investments in RE in 2017. This trend is expected to continue as RE deployment is key to climate change mitigation. Latin America has recently emerged as a new leader in renewable energy. Its ambitious renewable energy targets have resulted in some of the lowest bids in electricity generation auctions.
ReNew Power is the largest renewable independent power producer in India. With a portfolio of over 8 gigawatts (GW) in India today, it is now considering expanding its presence into Latin America.
The team was tasked with assisting ReNew Power to develop a market entry strategy for Latin America. In consultation with the client, five of the largest economies in Latin America - Argentina, Brazil, Chile, Colombia and Mexico, were prioritized. Each country’s macroeconomic growth, electricity market reforms, policy incentives, regulatory frameworks, foreign currency risk, current projects in the pipeline, electricity payment structures, foreign direct investment environment, potential barriers and competitors were analyzed. In addition, the team conducted interviews with experts and professionals in the field in order to understand the current situation on the ground. Based on their findings, Brazil stood out as the most attractive country for RE investment in the short-term. The team also proposed three recommendations across all countries: (i) Deepen market entry analysis, (ii) Establish connections with local presence, (iii) Explore corporate offtake agreements.