The key markets in Wärtsilä's LatAm growth plans

In the second of a two-part interview, Silvia Zumarraga, Wärtsilä Americas' general manager for market development, speaks to BNamericas about the Finnish company's near-term plans in Latin America and the Caribbean, and identifies key local growth markets. 

Zumarraga was a speaker at the 2022 Latin America Energy Forum in Washington, DC.

BNamericas: What is the role of fossil fuels in Wärtsilä's business model going forward? Are you seeing a decline in demand for your oil and gas-based solutions amid the global decarbonization drive? 

Zumarraga: We don't have a crystal ball. But long-term capacity projections and plans to achieve 100% renewables are taken very seriously by Wärtsilä. We have very powerful software and market research. Wärtsilä, as a corporation, has its own goals to achieve a path to 100% renewables. But the truth is you need to do a lot of research because each country is different with its own challenges. You cannot compare a Caribbean island with a country in South America or Africa.

We should be very careful not to generalize the path to 100%. We need to make sure we know what resources are available, based on proper modeling and assessment. 

BNamericas: Will the spike in oil and gas prices accelerate the shift towards renewables?

Zumarraga: There are two schools of thought on what effect the spike in oil and gas prices will have. Some say it will accelerate renewables and others say maybe not.

I believe the spike in fuel prices should be taken into consideration when trying to determine if a system needs future-based load in flexible thermopower plants versus the flexible gas that I spoke about earlier. It’s all very intimately related. 

BNamericas: Could you share with us any other opportunities that Wärtsilä sees elsewhere in the region?

In Latin America, there are a few countries that can be mentioned. For example, in El Salvador, the Energía del Pacífico LNG power plant will come online at the end of April. That's a highlight. Another country in Central America that we're taking a special interest in is Honduras, where terms of reference have been announced for an auction. Honduras typically has been a very good market for us. The request for proposals is expected to come out soon and we’ve modeled a system that we believe can help the country obtain even higher renewable penetration. 

Brazil is another very good market for us. We were very successful in the recent auction and we’re very well positioned with our technologies for the next flexible capacity auction later this year. 

In Colombia, the Tesorito project is coming online in June or July. We did the whole EPC there. 

We're also submitting an expression of interest for a 400MW gas project tender in Ecuador. The expressions of interest were due on the 31st of March and the schedule is for bids to be received before the end of the year. 

That's an interesting market because it’s a system with a very large hydro component and they're adding more renewables. Something like 93% of the generation is produced by hydro, which indicates that due to seasonalities and climate changes, they need firmness. The flexible technology that we just discussed can provide the reliability that the system needs when there’s dry weather. 

We’re very active in most of the Caribbean islands and Mexico as well. 

BNamericas: How does Wärtsilä see Mexico given the protectionist policies of the current government that are widely seen as being detrimental to private investment?

Zumarraga: Every market has its ups and downs. We hope that it will settle. We’ve been successful in Mexico. Last year we announced two projects with the CFE and one battery storage project. Those are currently in the development phase. I think we're cautious but we hope that the dust will settle.