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‘Energy independent’ Uruguay runs on 100% renewables for nine straight months

Graphic: Sean Creighton/The Progress Playbook
Graphic: Sean Creighton/The Progress Playbook

Renewables alone have powered the Uruguayan economy for nine straight months.

Between 1 July 2023 and end-March 2024, the South American nation generated all of its electricity from renewable sources — with wind the single-biggest contributor, according to data collated by Ember.

How it got here: Uruguay used to rely almost entirely on hydro- and oil & gas-based power. But as the economy grew and electricity demand threatened to overtake supply from the early 2010s, it needed to add additional generating capacity, and fast. New hydro wasn’t an option as it had already made the most of that resource.

To chart the way forward, the president appointed Ramón Méndez Galain, a particle physicist from the private sector, as the country’s director of energy — a position he held until 2015.

In a podcast discussion with the Kleinman Center for Energy Policy, Méndez Galain said one of his primary goals was to make Uruguay less reliant on volatile imported oil & gas. The quest for energy independence made him rule out nuclear power, which would’ve require uranium imports.

A decision was ultimately made to better exploit the country’s ample solar, wind, water and biomass waste resources.

Because the state couldn’t fund a massive energy programme alone, it ran a series of clean power auctions, where it offered project developers 20-year contracts to sell electricity into the national grid at guaranteed rates.

In just five years, $6 billion was invested in renewable energy — the equivalent of 12% of Uruguay’s GDP.

The results: Power production costs have declined “by almost half”, according to Méndez Galain. And the clean energy sector has created 50,000 new jobs — the equivalent of 3% of the labour force. Further, Uruguay has become a net exporter of electricity.

The rapid increase in wind power capacity has largely displaced oil use, even as electricity demand has steadily grown. Between 2017 and 2020, renewables made up 97% of the electricity mix and oil & gas just 3%.

“You become independent of all these kinds of wars or other geopolitical events,” Méndez Galain said.

“Ask me what was the impact on the electricity sector in Uruguay after this tragic war in Europe — zero. We have no impact because we’re not dependent on energy commodities.”

* This article was updated after the country extended its 100% renewables streak by another month.

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