When the going gets tough in the sometimes heated debate in the UK, Germany and elsewhere about the optimum place of renewables in electricity generation, it may be refreshing to point out that there are places in the world where renewables are the whole answer to the question. Most of them are small, with only one energy source- Lesotho, Paraguay and Bhutan depend almost exclusively on hydro; Iceland on geothermal- but Uruguay has a more diverse energy mix and, importantly, has taken decisive action on the regulatory side.
Currently, renewables provide around 95 per cent of the electricity used in Uruguay, a country which over the last ten years has dramatically reduced its carbon footprint, cutting out imports of oil and electricity and replacing them almost entirely by wind, biomass and solar. It is now four years since Uruguay imported any oil or electricity. And it is the more remarkable that this has been achieved apparently without any government subsidies, though admittedly with the aid of some tough power purchase agreements. These benefit renewables as they have become increasingly cost-competitive and there is also a gain in terms of energy security and supply, for to import petroleum products is to import the uncertainties inherent in the oil price.
Historically around 60 per cent of Uruguay’s electricity has come from hydro (about 1,500 MW) but this should be regarded as a built heritage. Much of the recent renewables growth has been in wind power, which is expected to reach over 1,650 MW by mid- 2018 and in biomass which directly fuels many of the agricultural processing plants. At a national level, the plan is to eventually rely on wind power for base load for the grid and only to use hydro for peak load, thus allowing dams to maintain their reservoirs for longer after the rainy season, an important element in reducing vulnerability to potentially expensive drought.
The population of Uruguay is less than 4 million, but it is not the case that the statistics in some way conceal a limited access to electricity. On the contrary, electricity reaches over 99 per cent of homes in Uruguay and the figure for investment in all aspects of renewable energy is between 15 and 17 per cent of GDP, five times the Latin American average.
But many would say that the key element in Uruguayan success has been recognition of the importance of strong decision-making. The country was once paralysed by a bitter debate about energy policy but that changed in 2008 with agreement on an all-embracing long-term plan with cross-party support. With clarity, and effective implementation, came inter aliadiversification in energy sources, increased private participation in new renewable power generation, and increased regional energy trade. That has made possible the advances now visible to us all.
Of course, there is still a long way to go. While electricity generation is almost entirely from renewables, this “only” accounts for some 55 per cent of all energy in the economy. The transport sector, for example is still dependent on imports. But then 55 per cent looks pretty good when compared with the world-wide average of around 15 per cent.
