Uruguay generates nearly all electricity from renewable sources

The government of Uruguay transitioned its national power grid to rely on renewable energy sources, achieving a 98% renewable electricity rate.

In 2008, Uruguay faced rising oil prices and a growing economy while experiencing frequent blackouts. While the country traditionally relied on hydropower, droughts caused by El Niño weather patterns made this source unreliable.

Financial institutions like the IMF and the World Bank suggested privatizing the power company to attract foreign investment, but the government rejected this to avoid higher electricity bills and loss of sovereignty. Ramón Méndez Galain, a particle physicist at the Universidad de la República in Montevideo, proposed a plan to prioritize wind and solar power while using hydropower as a backup.

Galain convinced the political and business communities to support the plan by using a reverse engineering approach, asking stakeholders to visualize the country's needs 30 years into the future. To fund the initial investment without government subsidies, Galain raised money from capital markets by securing long-term contracts that guaranteed loan repayments. The new system currently produces electricity at half the cost of the previous system. This transition has created 50,000 new jobs in the country.

Residents can now charge electric vehicles for $4, and smart meters allow these vehicles to act as batteries by storing excess energy at night and selling it back to the utility during peak demand. Galain now advises governments in the Global South through his nonprofit Asociación Ivy on how to redesign their electricity systems.