North and South America Renewable Energy Policy Handbook 2010

02 Sep 2010 • by Natalie Aster

GlobalData’s new report, “North and South America Renewable Energy Policy Handbook 2010” provides an in-depth analysis of the renewable energy policy initiatives and regulations in North and South America. The research focuses on the implementation and impact of policy initiatives on the growth of the renewable energy market in these regions. The report provides insights and information on renewable energy policies in North and South America and analyzes the drivers for the growth of the renewable energy market. It discusses the policy initiatives and legislation adopted by the governments in North and South America to promote growth and investments in the renewable energy market. Policy instruments such as Renewable Portfolio Standards (RPS), Feed-in Tariffs and Government Programs have been elaborated in each country in this report. The report also deals with various fiscal and financial measures such as tax credits, tax reforms, subsidies and low interest loans to encourage the growth of renewable energy in North and South America.

Regulatory Support Has Enabled the US to Emerge As the Top Producer of Renewable Energy in the Americas

Conducive regulatory policies have helped the US to emerge as the top producer of renewable energy in the Americas. At the end of 2009, the country had an installed renewable energy capacity of 53.4 Gigawatts (GW). The US also had the highest installed wind capacity globally and the third highest solar PV installed capacity globally, after Spain and Germany. The country’s installed wind capacity grew at an AAGR of 29.7% during the period 2000–2009 and is expected to further grow at an AAGR of 17.2% during the period 2009–2015. The solar PV capacity of the US increased at an AAGR of 27.5% between 2000 and 2009. The capacity is expected to further increase at an AAGR of 34.4% during the period 2009–2015.

Despite the fact that the US lacks a federal Renewable Portfolio Standard (RPS), the different levels of RPS adopted by the state governments have fuelled the growth of renewable energy. The recent enactment of the American Recovery and Reinvestment Act (ARRA), and the introduction of long-term Production and Investment Tax Credits in wind and solar energy significantly increased investments in renewable energy in 2009.

Spurred by Government Programs and Mandates, Brazil and the US will Dominate Biofuels Production in North and South America.

Brazil and the US will continue to dominate the global production and consumption of biofuels. The two countries together account for over 70% of the global production and roughly 90% of the ethanol used as fuel.

Brazil has 9.1 GW of total renewable energy installed capacity and is the largest producer of sugar cane globally. A host of government regulations and incentives have helped its biofuel industry immensely. PROALCOOL, the national alcohol program launched in 1975, aimed at increasing the number of cars run on Ethanol (E-100). Subsequently, in 2003, Flex Fuel Vehicles were introduced which could run on E-100, gasoline or any mixture of the two. In 2008, the number of cars running on ethanol (Flex–Fuel vehicles) increased to 2.3 million compared to 217,021 gas vehicles and only 84 ethanol vehicles.

The ethanol use mandate and biodiesel blending requirement of 25% and 5% respectively have significantly increased the consumption of biofuels in Brazil.

The US has also emerged as the top producer of biofuels and is rapidly increasing its biofuel production. To this end, the US has a set a target to produce 36 billion gallons of biofuel until 2022, of which 21 billion gallons is to come from advanced biofuels. The requirement is expected to play a vital role in the development of advanced biofuels in the country.

Canada and Latin American Countries Need Stronger Renewable Policies to Boost Growth in the Renewable Energy Sector

Canada and Latin American countries such as Brazil, Argentina and Mexico possess huge potential for the growth of renewable energy but they need a stronger renewable energy policy framework to ensure long-term growth.

Although Canada has made significant progress in the deployment of renewable energy, it lacks a national plan for the development of renewable energy. The federal government offers various incentives to encourage renewable energy production but there are no set targets or mandates to promote the industry. In recent years, initiatives at the provincial level have boosted the renewable energy industry. Various provinces offer Feed-In Tariffs (FIT) or have set mandatory RPS targets to promote renewable energy. In Ontario, the Renewable Standard Offer Program (RESOP) was replaced by FITs in October 1, 2009.

In Canada, ecoENERGY is the umbrella program under which various federal incetives are being provided to promote renewable energy production. This has led to an increase in wind power in Canada at an AAGR of 35.4% during the period 2000-2009. The installed wind power capacity is further expected to increase at an AAGR of 17.9% during 2009-2015.

Mexico, Brazil and Argentina, the major Latin American countries, have adequate potential for the development of renewable energy. However, their renewable energy policy frameworks and incentives have been unable to attract significant large scale investments. The failure of the Brazilian government to achieve the wind energy target set under the Programme of Incentives for Alternative Electricity Sources (PROINFA) Phase I, emphasizes the need for stronger policy support and implementation.

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