The different paths for renewable energies in Latin American Countries: The relevance of the enabling frameworks and the design of instruments

Abstract

The promotion of renewable energy is a priority for the majority of the regions of the world. The key motivation for the promotion of these sources varies according to the countries; in some cases, the aim is to mitigate climate change, in some others is to address the growing energy demand, or to reduce the dependence on imported fossil fuels. To this purpose, governments implement different energy policies, based on a combination of primary and secondary instruments. Nevertheless, the performance of the policy will depend on the policy design and the enabling environment of the policy, e.g., macroeconomic conditions, political and regulatory risk, and financial sources. During the last decades, many Latin American and Caribbean countries have implemented energy policies to promote renewable electricity. Many of these countries have used a similar combination of support instruments (feed-in laws, targets, auctions, investment subsidies, etc.). However, the results are very dissimilar. In some cases, similar policies, and even the same instruments led to significant increases in renewable energies, while in other cases the impact has been very small. The aim of this study is to review the recent application of energy policies to renewable energies in a group of South American countries and to analyze whether the performance of the policy is due to policy incentives or enabling environment.