Sun, wind and electricity theft: smart grid trends in Latin America
- Mar 14, 2016 5:52 pm GMT
In the world economy, Latin America stands out: a region of great resources and cultural roots that are shared by many. Of all the developing places in the world, it could move the fastest toward a 21st century electrical grid. But as with North American energy infrastructure, the Latin American grid has to adjust to accommodate solar and wind power as they reach scale. And other issues remain such as theft of electrical service.
A report prepared by Northeast Group, an electrical infrastructure research and consulting firm, in August 2015 highlights many of these concerns and actions—like grid improvements and smart metering—taken by nations in Latin America to address them. “Beyond Brazil, countries such as Colombia, Ecuador, Chile and Argentina are serious about grid modernization and planning significant investment,” says Ben Gardner, president of Northeast Group. “In total, South America will invest $22.6 billion in smart metering, $7.2 billion in distribution automation and $8.3 billion in other smart grid market segments over (2015-2025).”
Solar power trends in Latin America
Chile leads the photovoltaic market in Latin America in installed capacity, according to Evaristo Doria, Ed.D, faculty member and Latin American business opportunity researcher, Georgia State University.
“But in Brazil a solar revolution is gathering,” he said. “There will be a solar auction in November. The winners will obtain 20-year power purchase contracts. Brazil has set a goal of 3.5 gigawatts of solar capacity by 2023.” Not only will this be made up of large-scale solar farms but also micro- and mini-generation from residences and commercial properties, according to Doria.
Indeed, these new, smaller sources of renewable energy generation will challenge the grid in Latin America as this model of decentralized power takes hold.
“Solar photovoltaic distributed generation is gaining momentum in Brazil, Peru and Colombia thanks to governmental initiatives for solutions to provide electricity to isolated areas,” said Maria Benintende, Latin America energy and environment industry analyst, Frost & Sullivan. “The evolution of net metering regulations with declining module costs will rapidly expand generalized use of solar photovoltaic to industrial, commercial and residential consumers.”
Wind power currents in Latin America
While solar energy has made some strides in Latin America, wind power is further along and outpaces the world as a whole. “In the last 10 years wind generation capacity increased worldwide 25 percent on average; in the same period South America grew 51 percent—Central America 42 percent,” said Emerson de Souza, vice president of electricity for Latin America, Itron, an energy resources technology and services company. “On the other hand we haven’t done a good job with solar, less than 1 percent of the regional matrix comes from solar.”
Overall, solar and wind have strong potential across most of South America but are not yet well developed, according to Chris Testa, research director, Northeast Group: “Incentives are now in place in Brazil and Chile, which should help kick-start those markets. There are large plans for solar in northern Chile. Argentina and Uruguay have also invested significantly in wind, but Uruguay is still a small market and Argentina’s overall electricity rate freeze complicates plans there.”
Theft or customers just out of town?
Even with gaudy figures forecast for investment in electrical grid upgrades, Latin American utilities do not have limitless capital and need to choose carefully where deploy it. One such area, electrical service theft, remains a tricky one. “It is a dilemma where to invest to recover money,” said Márcio Dobal, vice president, Latin America, SAS, provider of analytics IP and consulting services to the utilities sector.
According to Dobal, some utility customers do not pay their bills because they cannot, and there is a low likelihood of recovering overdue charges. “Others travel a lot,” he said of customers overdue but much more likely to pay. “(Utilities) don’t charge (these customers) because they know they will pay on the other end. Software optimizes the behavior of taking actions of figuring out who will pay.”
For example, Brazilian electrical group company CEMIG uses this technology to save about one and half million Brazilian reals per month by identifying commercial losses related to misuse of energy and technical failures, according to SAS.
Derek Handova is a veteran journalist and content marketer writing on various B2B vertical beats. He contributes regularly to B2B News Network and Economy Lead. He can be reached at firstname.lastname@example.org.
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