How BESS is Revolutionizing Latin America’s Renewable Industry

As Latin America faces energy challenges, renewable energy emerges as the key to keeping cities powered, economies growing, and climate goals on track. The time for transformation is now.

As blackouts darken São Paulo’s skyline and Colombia grapples with the threat of energy rationing, Latin America faces a critical juncture in its energy journey. The region’s recent power crisis underscores an urgent need for a resilient, sustainable energy revolution. With climate change intensifying and populations expanding, Latin American nations must address a pivotal question: How can they meet escalating energy demands while ensuring environmental stewardship? The answer lies in a transformative fusion of renewable energy and cutting-edge battery energy storage systems —a combination that promises not just to keep the lights on but to illuminate a path toward energy security and climate leadership.

The shift towards renewable energy, particularly through the integration of solar and wind power combined with battery storage solutions, offers multiple benefits, both environmentally and economically. By effectively adopting clean energy solutions, countries in Latin America and beyond can achieve greater energy security, reduce greenhouse gas emissions, and drive economic growth.

Latin America’s Energy Transition: Challenges and Opportunities

Latin America’s energy landscape is as diverse as its terrain, yet a common thread of vulnerability runs through it.

Hydropower Fragility: Hydropower remains a cornerstone of the region’s energy strategy, but its susceptibility to climate-induced disruptions poses significant challenges. Brazil’s 2021 drought, the most severe in a century, exposed the fragility of its energy infrastructure, with water levels in hydroelectric reservoirs plummeting to critical lows. Colombia, also, relies on hydropower for electricity generation, with approximately 70% of its energy sourced from hydroelectric plants. However, this dependence exposes the nation to significant vulnerabilities, particularly during periods of drought. For instance, in 2024, Colombia faced severe drought conditions that led to critically low water levels in reservoirs, prompting concerns over potential power outages and water rationing. 

The reliance on hydropower across the region reflects a broader challenge by ensuring energy security in the face of intensifying climate variability. This challenge is further compounded by shifting energy demands driven by economic trends.

Nearshoring and Energy Demands in Mexico: Mexico’s growing energy demands, driven by the surge in nearshoring, are placing significant strain on the country’s power infrastructure. According to Moody’s Ratings, electricity demand increased by 3.8% in 2023, after growing 3.9% in 2022, exceeding the Energy Ministry’s projections of 2.5% annual growth.

As Mexico struggles with surging energy needs, other nations are grappling with the impacts of climate variability on their energy infrastructure, reinforcing the region-wide urgency to enhance resilience against environmental challenges.

Extreme Weather’s Impact: The effects of extreme weather events on Latin America’s energy infrastructure are increasingly evident, highlighting the urgent need for climate-resilient strategies. The region’s reliance on hydropower, coupled with shifting climate patterns, underscores this vulnerability. For example, Brazil’s historic 2021 drought demonstrated the fragility of its energy systems, while Colombia’s 2024 drought raised alarms about potential power outages due to critically low reservoir levels. These challenges are further intensified by long-term climate phenomena such as the “Central Chile Mega Drought,” which, at 13 years and counting, is the longest in 1,000 years. 

These crises often push governments towards quick fixes, compromising long-term environmental goals for short-term relief. However, such reactive measures conflict with the region’s commitments under the Paris Agreement and its vision for sustainable economic growth.

Renewable Energy: A Bright Solution for Latin America

Amidst these challenges, Latin America is making remarkable progress towards a cleaner energy future. According to the International Renewable Energy Agency (IRENA), the region has already achieved significant strides in renewable energy adoption. Latin America has pledged that 70% of the energy it generates will be renewable by 2030, While hydropower has traditionally been the cornerstone of the region’s renewable energy portfolio, contributing significantly to this target, other renewable energy sources are rapidly growing and diversifying the energy mix

Solar energy, in particular, is experiencing unprecedented growth. According to Wood Mackenzie, the levelized cost of electricity (LCOE) for renewable technologies in Latin America decreased by 8% in 2024, driven by lower capital costs and the normalization of supply chains. Additionally, the International Renewable Energy Agency (IRENA) reports that over three-quarters of the new renewable energy capacity added globally in 2023 was more cost-competitive than fossil fuels, further highlighting the growing competitiveness of sources like solar and wind. These trends solidify solar photovoltaic energy’s position as a cost-effective solution to meet the region’s increasing energy demands.

Complementing solar’s rise, wind energy is also gaining significant momentum across the region. Brazil, for instance, has emerged as a wind energy powerhouse. As of 2024, Brazil has surpassed 33 GW of installed wind capacity, positioning itself as the sixth-largest wind energy market globally. The country’s wind sector has transformed dramatically over the past decade, expanding from less than 1 GW to a robust, job-creating industry with approximately 1,100 wind parks. The broader Latin American region is expected to double its onshore wind capacity to 79 GW within the next decade, with Brazil, Chile, and Argentina leading this sustainable energy transformation.

Battery Energy Storage Systems: The Missing Piece of the Puzzle

While renewable energy offers immense potential, its intermittent nature challenges grid stability and continuous supply. This is where battery energy storage systems (BESS) play a crucial role, offering a solution to balance supply and demand. BESS ensures a reliable and consistent energy flow by storing excess energy during peak production periods and releasing it during high demand.

The battery storage market in Latin America is poised for robust growth. While specific data for Latin America is limited, global trends indicate significant expansion in the energy storage sector. Wood Mackenzie projects that global energy storage will grow by 636%, adding nearly 2,789 GWh of capacity over the next decade. The increasing integration of renewables, the need for grid resilience, and energy security concerns drive this growth.

Chile is leading the charge in integrating renewable energy with advanced storage solutions, as exemplified by Atlas Renewable Energy’s pioneering efforts. Atlas is developing the BESS del Desierto project, one of the largest energy storage initiatives in Latin America, with a storage capacity of 800 MWh and an installed capacity of 200 MW + 4 hours. This project demonstrates how large-scale storage can enhance grid stability and enable greater use of renewable energy. Atlas recently secured $289 million in financing for this standalone BESS project, marking a significant milestone in Chile’s energy transition.

 Integrating Renewable Energy and Battery Energy Storage: A Roadmap for Success

A strategic, multi-faceted approach is essential to successfully integrate renewable energy and battery storage into Latin America’s energy matrix. One key priority is to identify optimal locations for renewable energy installations and storage facilities, considering factors such as solar irradiance, wind patterns, and proximity to transmission infrastructure.

Equally important is the establishment of a supportive regulatory framework. Policies and regulations that incentivize renewable energy and storage investments while ensuring grid stability and fair market competition are crucial. Adopting dynamic pricing models and market mechanisms, such as feed-in tariffs or renewable energy auctions, can create a predictable and attractive environment for investors while driving down costs through competition. Additionally, implementing regional power integration agreements could enhance energy trade and grid stability across borders.

Furthermore, investing in smart grid technologies and infrastructure upgrades can accommodate the variable nature of renewable energy and optimize the use of storage systems. The integration of artificial intelligence (AI) and machine learning in grid management can predict energy demand and generation fluctuations, enabling real-time adjustments and minimizing energy waste. Smart grid deployment also offers resilience against climate-related disruptions, reducing downtime and maintenance costs.

Developing a skilled workforce through targeted education and training programs is vital to support the growing renewable energy and energy storage sectors. Through education initiatives and participatory planning, public engagement can foster community support and awareness, ensuring local communities benefit from and engage with renewable energy projects. 

Moreover, innovative financing models and public-private partnerships are needed to mobilize the significant capital required for large-scale renewable and storage projects. Green bonds, climate-focused investment funds, and blended finance approaches can attract diverse investor groups while mitigating financial risks. Establishing sovereign funds dedicated to renewable energy development can also provide consistent funding sources to accelerate progress.

These enhanced measures collectively offer a comprehensive pathway to transform Latin America’s energy landscape, ensuring a sustainable and resilient energy future.

 Atlas Renewable Energy: A Partner in Latin America’s Energy Transition

Atlas Renewable Energy plays a significant role in advancing renewable energy solutions across Latin America. With a portfolio exceeding 8.4 GW, Atlas integrates solar and battery storage technologies into its projects, demonstrating innovation in clean energy solutions. The Vista Alegre photovoltaic project in Janaúba, Brazil, with 902 MWp capacity, and ventures like the La Pimienta solar plant in Mexico exemplify Atlas’s commitment to large-scale regional renewable energy development. Additionally, the Sol del Desierto solar plant in Chile highlights this focus, showcasing the company’s dedication to advancing renewable energy across Latin America. These projects utilize cutting-edge technologies like bifacial modules and battery energy storage systems to optimize efficiency and output

Additionally, Atlas emphasizes sustainability and positive social impact with initiatives like the “We Are Part of the Same Energy” program, which trains local community members in technical skills for renewable energy jobs, and the “Clean Energy for Education” initiative, which provides solar-powered energy systems to schools. The company also runs the “Ed Mundo” program, which focuses on enhancing educational opportunities and environmental awareness among local youth. 

These efforts align with Atlas’s broader mission of enabling the energy transition while fostering community development​. Beyond immediate impacts, Atlas is committed to improving local infrastructure, supporting reforestation efforts, and driving long-term economic growth, ultimately empowering communities to build a more sustainable future.

Powering a Sustainable Future

The energy crossroads facing Latin America presents both a challenge and an unprecedented opportunity. By harnessing the synergies between renewable energy and battery storage, the region can construct a resilient, diversified energy matrix that meets its growing needs and positions it as a global leader in sustainable development.

The journey ahead requires concerted effort, strategic planning, and collaboration among governments, industry leaders, and communities. However, the potential rewards—energy security, economic growth, and environmental protection—far outweigh the challenges. As Latin America embarks on this transformative path, it has the opportunity to keep the lights on and shine brightly as a model of sustainable energy development for the world.

This article was created in partnership with Castleberry. At Castleberry, we are dedicated to environmental sustainability. By purchasing carbon certificates for tree planting, we actively combat deforestation and offset our CO₂ emissions threefold.