Latin American governments have begun to implement major rural renewable energy projects to bring electricity to the 75 million people that live beyond the reach of current transmission grids, according to industry analysts Frost & Sullivan.

Because of the tremendous costs associated with extending traditional electrical and telecommunications grids to remote areas, governments, power utilities and telecom companies will likely turn to renewable energy technologies to provide electricity and to power remote telecom stations, according to the report.

Mexico, Central and South America combined have one or the highest percentages of renewable energy use worldwide, accounting for approximately 35 per cent of the overall energy mix in the region. However, many Latin American countries where there are abundant renewable energy resources presently generate only a fraction of their power this way and therefore offer great potential for renewable technologies.

According to Frost & Sullivan’s Latin American Renewable Energy Markets report, Solar, wind power, geothermal and biomass technologies have proven to be viable energy sources, and are now being investigated as long term solutions for electricity generation in the region.

Rural electrification in Latin America is hampered by an inadequate transmission infrastructure. The remoteness of some locations means that extending grid connections would be extremely costly and in these circumstances, a more cost-effective option may be the use of renewable technology. These systems have the benefit of being able to produce stand-alone power, eliminating the need to extend transmission lines.

Frost & Sullivan quotes a cost of $1800 per kilometre of mono phase low voltage transmission line and $3000 for three phase line – which may only serve one household. This compares with an individual photovoltaic system costing on average $647 per household. These systems can be installed close to the load being served eliminating the need to extend transmission lines.

Earlier schemes have fallen foul of reliability problems particularly with old diesel generator sets and poorly installed photovoltaic panels. Improved technology has resulted in greater consumer confidence and as a result, many governments have pledged to make significant investments in rural electrification programmes.

Argentina is implementing a $120 million programme aimed at supplying 70 000 rural households with electricity and 1100 provincial public service institutions – using principally photovoltaic, wind and biomass.

Brazil will invest an initial $25 bn to develop 20 000 MW of renewable energy capacity aimed at communities unlikely to benefit from grid extensions within the next five years.

Chile’s National Electricity Commission has instituted an aggressive rural electrification programme, which since 1992 has invested $112 million and which aims to supply electricity to 100 per cent of the population.

With many Latin American countries facing the likelihood of a shortfall of electricity over the next few years, the addition of renewable capacity offers a valuable diversification away from a dependency on traditional power sources, such as hydroelectric power. In Brazil, where the energy crisis is most acute, urgent efforts are underway to encourage the use of renewable energy generation. Frost & Sullivan reports that a number of firms are investigating or developing projects within the country and that sales of solar power equipment have increased 30 per cent within the last two months.