Uruguay advances towards energy independence with renewables
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Uruguay, a South American country of 3.5 million people, has transformed its energy sector from one facing crisis in 2008 to a leader in renewable energy.
The country addressed an energy crisis and high prices by investing in a diverse mix of renewable sources. Today, Uruguay’s electricity comes from 50% hydropower, 30% wind, 15% biomass, and 3% solar power, with fossil fuels accounting for only 2% of electricity generation.
This shift began with a national “New Deal” between 2010 and 2020, where the government and private companies invested around seven billion US dollars in renewable energy projects. Ramón Mendez, as National Energy Director, secured agreement across political parties and created long-term regulatory stability and tax incentives. This planning encouraged participation from farmers, universities, and created around 50,000 new jobs.
Despite this success, electricity prices remain high for consumers, averaging around 150 US dollars per month for a family of four. Uruguay is now focusing on reducing its reliance on imported oil, which still makes up around 35% of its total energy mix, by transitioning public transportation and private vehicles to electric power. Montevideo, the capital, is replacing its bus fleet with electric models, and nearly 70% of new car sales are now electric vehicles.
However, Mendez cautions that maintaining political consensus and long-term planning is crucial for continued success, as shifting governments can disrupt progress.
