Uruguay, leader in renewable energies

Its privileged natural resources and forward-looking legislation have allowed it to be at the forefront of this sector of activity.
Publication date: 18/12/2019

In recent years, Uruguay has completely transformed its energy matrix. Between 2010 and 2016, it invested US$ 7.8 billion in energy infrastructure, and 97% of electricity is now generated from renewable sources. In 2018, 38% of electricity generation was wind (the second largest in the world in terms of percentage of this energy in its electricity matrix), 7% biomass, just over 3% photovoltaic, just under 3% thermal and the rest -almost half- hydroelectric.

At present, Uruguay is one of the leading countries in the world in terms of wind energy production, together with Denmark, Ireland and Germany, with more than a third of its electricity coming from wind farms.

Uruguay, the most equitable country in Latin America and with the highest average income, achieved this transformation of its energy matrix by assuming strong commitments to environmental care and sustainable production.

So it was no surprise when Uruguay was recognized in 2018 as one of the leading nations in wind and solar energy production by REN21, which is supported by the UN to promote renewable energy worldwide. In addition, the International Renewable Energy Agency (IRENA), in a recent publication (Innovation Landscape for a renewable-powered future, June 2019), cites the Uruguayan experience as one of the examples of successful management of electricity systems with high participation of renewables.

Uruguay has an ideal location for solar, wind and hydro power generation, with a peneplain landscape and hundreds of miles of ocean and river coastline.

Using forward-looking legislation and incentive schemes, Uruguay is also efficient in attracting good business within the sector. Its policy of freedom to generate energy encouraged significant private-sector investment, and together with the public sector it invested more than 3% of GDP annually in energy infrastructure during the period in which the change in the energy matrix was processed. REN 21 of 2016 (Renewables Global Status Report) ranked Uruguay fifth in the world in terms of investment in renewable energy as a percentage of GDP.

Uruguay is at the forefront of energy policy in Latin America and the world and its successful model has been emulated by several other countries. The keys to achieving these milestones have been the country's natural conditions, political will, a modern and effective regulatory framework, and the implementation of a public-private partnership model for investment in the sector.

The transformation of the electricity matrix carried out by Uruguay involved the incorporation of renewable generation that will minimize supply costs. At present, there are already structural surpluses that present great opportunities for their use.

Electric mobility will be a fundamental component of this transformation, particularly with urban buses and light vehicles (utilities and taxis). The initiatives that the country is considering in this sector are now aimed at decarbonizing the global electricity supply matrix.