Uruguay makes dramatic shift to nearly 95% electricity from clean energy
One small country is making that transition look childishly simple and affordable. In less than 10 years, Uruguay has slashed its carbon footprint without government subsidies or higher consumer costs, according to the country’s head of climate change policy, Ramon Mendez.
In fact, he says that now that renewables provide 94.5% of the country’s electricity, prices are lower than in the past relative to inflation. There are also fewer power cuts because a diverse energy mix means greater resilience to droughts. It was a very different story just 15 years ago. Back at the turn of the century oil accounted for 27% of Uruguay’s imports and a new pipeline was just about to begin supplying gas from Argentina.
Now the biggest item on import balance sheet is wind turbines, which fill the country’s ports on their way to installation. Biomass and solar power have also been ramped up. Adding to existing hydropower, this means that renewables now account for 55% of the country’s overall energy mix (including transport fuel) compared with a global average share of 12%.
Uruguay is being recognised for progress on decarbonising its economy. It has been praised by the World Bank and the Economic commission for Latin America and the Caribbean, and the WWF last year named Uruguay among its “Green Energy Leaders”, proclaiming: “The country is defining global trends in renewable energy investment.”
Cementing that reputation, Méndez, formerly the country’s national director of energy, has gone to this week’s UN talks with one of the world’s most ambitious national pledges: an 88% cut in carbon emissions by 2017 compared with the average for 2009-13.
There are no technological miracles involved, nuclear power is entirely absent from the mix, and no new hydroelectric power has been added for more than two decades. Instead, he says, the key to success is rather dull but encouragingly replicable: clear decision-making, a supportive regulatory environment and a strong partnership between the public and private sector.
As a result, energy investment, mostly for renewables, but also liquid gas, in Uruguay over the past five years has surged to $7bn, or 15% of the country’s annual GDP. That is five times the average in Latin America and three times the global share recommended by climate economist Nicholas Stern.
“What we’ve learned is that renewables is just a financial business,” Méndez says. “The construction and maintenance costs are low, so as long as you give investors a secure environment, it is a very attractive.”