Uruguay Now Gets Nearly 95 Percent of Its Electricity From Renewable Sources

Less than 10 years after instituting a new energy policy, Uruguay has slashed its carbon footprint without government subsidies or higher consumer costs, reports the country’s head of climate change policy.

Ramon Mendez, formerly the country’s national director of energy, presented one of the most ambitious national pledges during the first week of talks at the United Nations climate talks in Paris: an 88 percent cut in carbon emissions from the country’s 2009-13 average by 2017.

The share of renewable sources in Uruguay’s total energy mix is now 55 percent. The global average is 12 percent and Europe’s is about 20 percent.

The Guardian reports:

[Mendez] 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. […]

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.” […]

Méndez attributed Uruguay’s success to three key factors: credibility (a stable democracy that has never defaulted on its debts so it is attractive for long-term investments); helpful natural conditions (good wind, decent solar radiation and lots of biomass from agriculture); and strong public companies (which are a reliable partner for private firms and can work with the state to create an attractive operating environment).

While not every country in the world can replicate this model, he said Uruguay had proved that renewables can reduce generation costs, can meet well over 90% of electricity demand without the back-up of coal or nuclear power plants, and the public and private sectors can work together effectively in this field.

Mendez says there is still much to do. The transport sector, for instance, remains dependent on oil (which accounts for 45 percent of the country’s total energy mix).

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— Posted by Alexander Reed Kelly.