Abstract
In the last 50 years, the total consumption of primary energy in Uruguay doubled and the structure by sources has been transformed, while an important decarbonization process has been observed. Fossil fuels, which represented 70% of the gross supply in the 1970s, were around 40% before the outbreak of the SARS-CoV-2 pandemic. The center of the changes has been in the electricity sector, where hydroelectricity, biomass waste, and, in the last decade, wind and solar energy have contributed to 98% of generation coming from renewable sources. In this context, they have talked about the “wind revolution” and the Uruguayan experience has been weighed very positively. As a result of this, our country was selected, among more than 100 countries, to receive support from the United Nations Joint Fund for Sustainable Development Goals, to implement a program to promote the country’s second energy transition, favoring the decarbonization of different sectors of its economy (especially transport and industry). In this work, a critical balance of the transformation of the electrical matrix is carried out, mobilizing diverse tools to discuss some tensions that accompanied the process and some results in economic and political matters. Competition and/or complementarity between hydro and wind power, the supply of demand cost, the impacts on other productive sectors associated with the “national component of investment,” the loss of sovereignty, implicit in the privatization of the generation, and the wind revolution as a financial building and its risk are some of the dimensions that are addressed. An important conclusion of work is the important role that the public sector has occupied and, in particular, the public electricity company in the dynamics and the sense of transition.
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Notes
- 1.
In Uruguay, the term “second energy transition” has been generalized to refer to the process that would deepen the transition of the country’s transport and industry sectors toward green energy.
- 2.
In addition to wind mapping and capacity factor estimates, the accumulation of information and management capabilities of a more complex electrical matrix, due to the incorporation of intermittent power in the network, were critical factors.
- 3.
In Altomonte (2017: 37), it is stated that with regard to the efforts to articulate the national technological, industrial development and associated national services, from the inclusion in the so-called price incentive bids for those projects with a greater national component, “the results did not live up to expectations”.
- 4.
The incorporation of modern forms of energy into the Uruguayan energy matrix manifested itself in a growing dependence on foreign sources to obtain fossil fuels. The absence of these in the territory and the need to incorporate technologies associated with the technical system of electricity led Uruguayan society to discuss early technical and institutional alternatives to ensure supply. The only abundant indigenous sources to meet the challenge were water and wind (Bertoni, 2011). Research to develop a “national fuel” and to exploit hydraulic resources in Uruguay dates back to the first decades of the twentieth century (Martínez, 2007; Waiter, 2019). The first evaluations of the wind resource were carried out in the 1950s by the engineers Emanuele Cambilargiu, Oscar Maggiolo and Agustín Cisa (Bertoni, 2020).
- 5.
Since 1912, the UTE held a monopoly on the generation of electricity for public service, even though the installation of some private biomass plants – and especially the cellulose plants – constituted an advance in that sense. Between 2005 and 2015, the share of this source increased 15-fold, reaching 9% of installed power in the last year.
- 6.
Oscar Ferreno. Interview conducted for this job.
- 7.
Originally this state company was called the General Administration of State Electric Power Plants (Law No. 4273 of 10/20/1912).
- 8.
To make investment decisions, you need a solid understanding of the expected energy performance and the associated level of confidence. The wind map was developed by the Faculty of Engineering of the University of the Republic in 2009, through an agreement with the Uruguayan Wind Energy Program (PEEU) and made available to investors. http://www.energiaeolica.gub.uy/index.php?page=mapaeos
- 9.
Law No. 17930 of 12/19/2005, article 256 (accessed 12/08/2022).
- 10.
Interview with Ramón Méndez on Radio El Espectador (07/05/2015). Quoted by Esponda, 2018.
- 11.
- 12.
Oscar Ferreño in an interview conducted for this work.
- 13.
It should be noted that the maximum level without subsidies incorporates some “tax expense” since it implies the noncollection of corporate income tax during the first five years (see https://www.youtube.com/watch?v=Ls9USMq1VA4). Therefore, the upper price range without subsidy would be slightly higher.
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Bertoni, R., Messina, P. (2023). The “Wind Revolution” in Uruguay and the Role of the Public Sector in Guiding Energy Transitions. In: Lazaro, L.L.B., Serrani, E. (eds) Energy Transitions in Latin America. Sustainable Development Goals Series. Springer, Cham. https://doi.org/10.1007/978-3-031-37476-0_12
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