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Mexico and Chile are expected be at the vanguard with the lowest prices in electricity sector
2023-01-11
As the years advance, Solar PV is predicted to become the most cost-effective source of electricity in Latin America, surpassing onshore wind, as detailed by Wood Mackenzie in their research report "Latin America Levelized Cost of Electricity (LCOE)". By 2050, the solar LCOE is forecasted to shrink down to USD 14 (EUR 13.55) per MWh due mainly to technology advancements like bifacial modules making up a majority of the market. Mexico and Chile are expected be at the vanguard with the lowest prices in this sector.
In addition, standalone storage costs have also been drastically reduced by an average 64%, when combined with solar cost reductions this leads to an overall decreased LCOE for hybrids in Latin America of USD 21.4/MWh by 2050.
A converse trend is expected for onshore wind, where its costs are projected to increase sharply by 2024 due to supply chain issues and high inflation, before gradually recuperating. Offshore wind has also seen a decline in cost, however it is unlikely that prices will reach parity with other renewables. Brazil and Colombia have the most competitive LCOE of USD 79.7/MWh and USD 57.3/MWh respectively by 2035 as calculated by WoodMac's research.
As the years advance, Solar PV is predicted to become the most cost-effective source of electricity in Latin America, surpassing onshore wind, as detailed by Wood Mackenzie in their research report "Latin America Levelized Cost of Electricity (LCOE)". By 2050, the solar LCOE is forecasted to shrink down to USD 14 (EUR 13.55) per MWh due mainly to technology advancements like bifacial modules making up a majority of the market. Mexico and Chile are expected be at the vanguard with the lowest prices in this sector.
In addition, standalone storage costs have also been drastically reduced by an average 64%, when combined with solar cost reductions this leads to an overall decreased LCOE for hybrids in Latin America of USD 21.4/MWh by 2050.
A converse trend is expected for onshore wind, where its costs are projected to increase sharply by 2024 due to supply chain issues and high inflation, before gradually recuperating. Offshore wind has also seen a decline in cost, however it is unlikely that prices will reach parity with other renewables. Brazil and Colombia have the most competitive LCOE of USD 79.7/MWh and USD 57.3/MWh respectively by 2035 as calculated by WoodMac's research.