South America's cumulative onshore wind capacity is projected to double to 79GW over the next decade, driven by the installation of 40GW of new capacity by 2033, according to a report by Wood Mackenzie. Last year saw a record addition of 5.9GW of onshore wind in the region, fueled by Brazil's rush to secure expiring wheeling fee subsidies, as highlighted in the analyst's latest outlook.
Brazil maintains its position as the largest market in South America, contributing 54% of the region's growth with an expected addition of 21.5GW by 2033. Chile follows with 6.2GW and Argentina with 4.5GW, leveraging commercial and industrial power purchase agreements (PPAs) to drive wind development.
“As the initial surge in renewables driven by policy slows in Brazil and Chile, South America faces moderate growth in the near term,” explained Karys Prado, senior research analyst for power and renewables at Wood Mackenzie. She emphasized the importance of grid upgrades to mitigate competition from solar power, which benefits from dispersed locations and completed essential grid infrastructure.
Prado highlighted the critical role of the free market in driving growth, particularly with large offtakers pursuing decarbonization goals and flexible contract terms in mature markets like Argentina, Brazil, Chile, and Peru. Colombia and Ecuador, on the other hand, rely on regulated markets and centralized auctions to support wind development.
State utilities in Bolivia, Guyana, and Uruguay are also expected to play significant roles in promoting onshore wind projects. Wood Mackenzie's report underscores the need for clear policy frameworks that support supply and demand dynamics, from diversifying the power mix to advancing green hydrogen initiatives across South America.
