Latin America PV Playbook

Transcription

1 Latin America PV Playbook Executive Summary Q Market Update May 2016

2 About the Latin America PV Playbook Deep insights on an emerging market Latin America is at the global frontier of emerging solar markets. Countries like Mexico and Chile are providing regulatory frameworks for competitive PV development while Brazil along with countries in Central America, the Caribbean and the Rest of South America is supporting gigawatts of deployment through solar-specific auctions and more direct government support. The region is at an early stage but offers a significant opportunity due to its sizable long-term potential and world-leading growth rates. To enable players to make the most of the region s potential, GTM Research s Latin America PV Playbook is the industry's most insightful analysis of the market. What s in the Playbook? Quarterly Market Updates - The Playbook is published quarterly, providing insights into the major developments of the previous quarter. With an eye on the future, it offers an assessment of the trajectory of the market by forecasting demand and analyzing the projects and players that will make it happen. Recognizing that the market has numerous upside and downside risks, the Playbook also provides a scenario-based assessment of the market s future Comprehensive Coverage - The Playbook s analysis spans across market segments residential, commercial, industrial and utility-scale, and includes a deep focus on the major markets of Brazil, Chile and Mexico while covering countries in Central America, the Caribbean and the Rest of South America In-depth Project Database 1 - Every quarter, the Playbook is accompanied by the Latin America PV Project Tracker which is a spreadsheet-based database of over 1,100 projects across all the countries in the region with details on project developers, project sizes, locations, off-takers, PPA values and more 1. Available only as part of the annual subscription 1

3 The research team Mohit Anand is a Senior Analyst at GTM Research covering global solar markets. With previous experience covering demand dynamics and business strategies in emerging markets like India, Mohit analyzes the market fundamentals, government policies, risks, and competitive strategies that determine the success of solar players globally. Before joining GTM Research, he participated in the early stages of growth of the Indian solar industry by setting up a solar market intelligence team, advising project developers on new solar business models, and consulting for international solar companies on their market success strategies. Mohit holds a bachelor s degree in economics from St. Xavier s College, Mumbai, a master s degree in international studies from the National University of Singapore, and a master s degree in public administration from the Kennedy School of Government at Harvard University. Manan Parikh is a Research Associate at GTM Research covering global downstream markets. Prior to GTM, his work has been extensively research based, centering upon alternative fuels infrastructure development and Low Carbon Fuels Standard (LCFS) policy models for the Schatz Energy Research Center and UC Berkeley in Northern California. In California, he was also an ambassador to start-up teams within the Clean Tech Open accelerator as well as a consultant to DOE SunShot Catalyst Award winner, PVComplete. In Washington, DC he worked on biomass policy at the American Council On Renewable Energy. He is an alumnus of The University of Texas at Austin, where he graduated with a B.S. in Biochemistry, as well as the DC-based Clean Energy Leadership Institute in its inaugural class. 1. Available only as part of the annual subscription 2

4 Executive Summary Q Market Update

5 MW Executive Summary: Auction-led demand continues to strengthen prospects for solar in Latin America Latin America PV Demand E 10,000 8,000 6,000 Cumulative Forecast = 27GW CAGR = 37% 9.3% 8.1% 7, % 9.0% 8.0% 7.0% 6.0% 5.0% Latin America had a record year in 2015 installing 1.4GW, 813MW more than in is set to be another record year for solar in the region with the market growing 55% to 2.2GW The strengthening of the market is 4,000 2, % 1, % 2, % 3.0% 2.0% reflected in the fact that the region s share of global demand will increase year-on-year to peak at 9.3% in 2018 Utility-scale auctions in Brazil, Chile, 1.0% and Mexico in which solar is out E 2016E 2017E 2018E 2019E 2020E 0.0% competing other clean technologies are the key driver behind its strong Annual Installed PV Global Demand Share growth in the region Source: GTM Research Global Solar Demand Monitor Q

6 Share of Regional Demand Executive Summary: Chile leads regional demand but will soon give way to Mexico and Brazil Latin American Markets Share of Regional Demand E 100% 6% 4% 4% 4% 4% 9% 3% 5% 4% 6% 90% 5% 4% 8% 6% 1% 2% 4% 4% 3% 2% 4% 80% 9% 7% 8% 1% 1% 39% 70% 28% 1% Chile was the largest market in 2015 with 37% share of regional demand and will remain in the lead in 2016: The market has been driven by merchant projects 60% 29% 47% 34% 33% 50% 4% 7% 2% 7% 40% 16% 18% 30% 30% 12% 49% 20% 37% 28% 23% 25% 10% 14% 0% 3% E 2017E 2018E 2019E 2020E Brazil Chile Mexico Argentina Peru Central America The Caribbean The Rest of South America Source: GTM Research Latin America PV Playbook: Q Mexico will be close to Chile in 2016 with 29% of regional demand share as several grandfathered projects are under construction now that there s more certainty in the market Brazil has a 3GW pipeline driven by auctions but few installations: This will change in 2016/2017 as several projects face completion deadlines An auction in Peru and one planned in Argentina position them as markets on the rise in Latin America 5

7 Executive Summary: Brazil s outlook is weak whereas Mexico s has significantly strengthened Latin America Major Markets PV Outlook Brazil Chile Mexico Outlook: Weak Significant downside risks from political uncertainty and a very weak macroeconomic environment make conditions weak Falling electricity demand and cancellation of several transmission projects needed for solar generation further weaken fundamentals Solar installations remain stuck because of a severe lack of financing and drastic depreciation of the Real Source: GTM Research Latin America PV Playbook: Q Outlook: Neutral Low spot prices have suppressed demand: They are at their historical lowest and often negative due to high congestion at the SIC-SING interconnection point and will not recover until the new 753km Cardones- Polpaico transmission line opens A crash in global copper prices has contracted mining demand but copper prices are showing early signs of a turnaround and demand from the sector could rise again Outlook: Strong Solar s strong win of 74% of energy offered in the country s first clean energy auction held in March 2016 has boosted market sentiment and demand Another auction with 9TWh of energy on offer is scheduled for Sept and solar could win 60-70% of the energy offered MW of additional grandfathered projects will execute given better certainty in the market from the energy transition law 6

8 Market Segmentation Executive Summary: The utility-scale segment dominates demand but the distributed generation segment will strengthen over the next years Latin America Market Segmentation E 100% 90% 80% 70% 60% 84% 81% 90% 90% 91% 91% 50% 40% 30% 20% 3% 2% 10% 8% 10% 2% 2% 1% 1% 5% 5% 5% 5% 3% 3% 3% 3% 6% 7% 0% 2015E 2016E 2017E 2018E 2019E 2020E Residential (<20kW) Commercial (20kW - 1MW) Industrial (1MW - 5MW) Utility (>5MW) Source: GTM Research Latin America PV Playbook: Q Auction-led demand is skewing the market towards the utility-scale segment as governments prefer rapid solar competitiveness through economies of scale Brazil, Chile and Mexico each have predominantly utility-scale markets New markets Peru and Argentina too are pushing utility-scale projects Brazil and Mexico have early stage distributed generation markets that will grow and push that segment s share of demand in the region Chile is the only major market that is conspicuous in its lack of a viable incentive for distributed generation 7

9 Executive Summary: Chile continues to soar above the pack for installed capacity in Latin America; Brazil and Mexico make strides in projects under construction Regional Project Pipelines (MW dc ) Carribbean Central America Mexico Peru Brazil Rest of South America Chile Source: GTM Research Latin America PV Project Tracker 8

10 Executive Summary: Enel Green Power leads the way in Latin America with over 700MW dc under construction in key regional markets Top Developers with under construction pipelines in select markets Mexico Brazil Fisterra Energy Eosol Canadian Solar Enel Green Power Buenavista Renewables Capacity (MW dc ) Capacity (MW dc ) Chile Enel Green Power Acciona SunEdison Pattern Energy SunPower Capacity (MW dc ) TerraForm Global/SunEdison Uruguay Capacity (MW dc ) Source: GTM Research Latin America PV Project Tracker 9

11 About the Report

12 Contents of the Report 1. Executive Summary 3 2. Brazil Chile Mexico Market on the Rise Argentina Market on the Rise Peru Central America The Caribbean The Rest of South America 56 11

13 List of Figures From the Report Executive Summary Latin America PV Demand E Latin American Markets Share of Regional Demand E Latin America Major Markets PV Outlook Latin America Market Segmentation E Regional Project Pipelines (MWdc) Top Developers with under construction pipelines in select markets Brazil Brazil Overall PV Demand E Brazil Market Segmentation E Brazil Utility Scale (projects >5 MW) PV Demand E Brazil Utility-scale Developer Rankings Q Developments taking place within Brazil s PV market Falling value of PPA prices and rising ceiling prices in Brazil Brazil Distributed Generation (<20 kw-5 MW) PV Demand E Brazil Overall PV Demand Scenarios 2016E-2020E Brazil Residential (<20 kw) PV Demand Scenarios E Brazil Commercial (20 kw-1 MW) PV Demand Scenarios E Brazil Industrial (1-5 MW) PV Demand Scenarios E Brazil Utility-Scale (>5 MW) PV Demand Scenarios E Chile Chile Overall PV Demand E Chile Market Segmentation E Chile Utility Scale (projects >5 MW) PV Demand E Chile Utility-scale Developer Rankings Q Sistema Interconectado del Norte Grande (SING) Grid PV Highlights Sistema Interconectado Central (SIC) Grid PV Highlights Difference in capacity awarded between the last CNE auction and the next one Spot prices in Chile in SIC and SING grids Change in expected SING territory PV Pipeline Chile Distributed Generation (<20 kw-5 MW) PV Demand E Chile Overall PV Demand Scenarios 2016E-2020E Chile Residential (<20 kw) PV Demand Scenarios 2016E-2020E 2020E Market on the Rise: Argentina Argentina Overall PV Demand E Chile Commercial (20 kw-1 MW) PV Demand Scenarios 2016E- Argentina Policy Evolution in Favor of Solar 2020E Insolation Levels in Argentina Chile Industrial (1-5 MW) PV Demand Scenarios 2016E-2020E Market on the Rise: Peru Chile Utility-Scale (>5 MW) PV Demand Scenarios 2016E- Peru Overall PV Demand E 2020E Auctioned capacity versus operational capacity in Peru Mexico Central America Mexico Overall PV Demand E Central America Overall PV Demand E Mexico Market Segmentation E Central America Market Segmentation E Mexico Utility Scale (projects >5 MW) PV Demand E The Caribbean Mexico Utility-scale Developer Rankings Q Total capacity of auctioned projects by developer Total capacity of auctioned projects by state IRR Estimates Relative to PPA Prices with fixed GTM Research Assumptions State-level Status of Grandfathered Pipelines Where CENACE will award projects in the next auction Mexico Distributed Generation (<20 kw-5 MW) PV Demand E Mexico Overall PV Demand Scenarios 2016E-2020E Mexico Residential (<20 kw) PV Demand Scenarios 2016E- 2020E Mexico Commercial (20 kw-1 MW) PV Demand Scenarios 2016E-2020E Mexico Industrial (1-5 MW) PV Demand Scenarios 201E-2020E Mexico Utility-Scale (>5 MW) PV Demand Scenarios 2016E- The Caribbean Overall PV Demand E The Caribbean The Rest of South America Overall PV Demand E 12

14 Accompanying Latin America PV Project Tracker Project Tracker Sample Project Tracker Summary, Q Number of Projects 1,125 Number of Countries 30 Current Announced 27,780 MW Current Contracted 6,990 MW Under Construction 4,803 MW Total Operational 1,812 MW Source: <Insert source> Source: <Insert source> 13

15 Purchasing Information

16 Pricing and purchase options Individual Quarterly Report: $1,995 Annual Subscription - 5 reports and project database: $5,995 To purchase, visit or contact: Matthew Casey, Manager Solar Research Sales casey@gtmresearch.com Zack Munsell, Research Sales Associate zmunsell@gtmresearch.com

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