A worker collects wood chips at Fenirol, a biomass plant in Tacuarembó, Uruguay.Mariana Greif Etchebehere (Bloomberg)
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The last international conference on renewable energies, held in Madrid at the end of February, had among its special guests Uruguay, the second country in the world with the highest share of variable renewable energies (such as solar and wind) in the generation of electricity, according to the REN21 report.
"Europe is very lost with the energy issue and they see the Uruguayan case as a very strong model to follow," physicist Ramón Méndez, Uruguay's national director of energy between 2008 and 2015, told América Futura, after having exposed the singularities in Madrid. of the process that managed to decarbonize the Uruguayan electricity matrix by more than 95% in less than ten years.
Méndez recalls that, without resources such as gas, oil or coal, Uruguay, a small country of 3.4 million inhabitants, was experiencing a "perfect storm" in 2008, caused by high fuel prices, the increase in electricity demand and the limited local infrastructure that led to an energy supply crisis.
“The fact of not having resources helped us to look for different paths”, he explains.
A multi-party agreement reached in 2010 adopted the energy transition towards indigenous and renewable sources as a State policy, guaranteeing its execution and continuity.
Since then, the country has undergone a radical transformation in electricity generation, replacing the use of imported fossil fuels with a combination of water, sun and wind.
The latter, above all, gained special prominence: 700 wind turbines were installed, distributed in 41 public and private wind farms, with a total generation capacity of 1,500 megawatts that cover more than 30% of the local electricity demand.
"Globally, Uruguay is in second place after Denmark in penetration of solar and wind energy," Marcelo Mula, president of the Uruguayan Association of Renewable Energies, told América Futura.
In a year of normal rainfall, 97% of the national electricity demand is covered by renewable energies, through a combination of wind (32%), biomass combustion (17%), solar (3%), in addition to the traditional and hydroelectric veteran (45%), she explains.
The remaining percentage corresponds to the electricity generated by thermal power plants with fossil fuels, whose use increases when the weather affects the operation of other clean sources, as has happened due to the "exceptional" drought that has plagued the country since 2020.
According to the International Energy Agency, on a global scale these numbers are significantly different: only 24% of the electricity consumed worldwide is produced from renewable sources, while more than 75% of electricity continues to depend on coal and other fossil fuels.
A Tecnogroup worker walks near photovoltaic panels in Constancia, Uruguay.Mariana Greif (Bloomberg)
The Uruguayan model: a public-private partnership
Méndez assures that the rapid transformation of the Uruguayan electrical matrix was possible thanks to the "fundamental role" that the State played in the design and direction of the process.
In this sense, the public-private association was established through energy purchase and sale contracts for a term of 20 years.
Thus, private companies that produce electricity are obliged to sell it only to the state-owned utility UTE, which generates, transmits, and distributes electricity in Uruguay.
For its part, the public company promised to buy all the electrical energy produced in the country, which it uses for domestic use or for export.
According to the former director of energy, with this model, the country went from an average generation cost of 1,100 million dollars per year to 600 million.
“We are spending 500 million dollars less than before,” Méndez remarks.
During this process, he adds, 2,000 million dollars were invested in the economy, 50,000 jobs were created and 99.9% electrification was achieved in the territory.
Uruguay, for example, was the first country in Latin America with 100% of rural schools with access to the electricity grid.
Among the works carried out during the energy transition, Mula highlights the construction of an energy conversion plant in Melo (east of the country), which allowed the interconnection with Brazil to be strengthened.
"Since 2018, Uruguay has been a net exporter of energy and (the state power company) UTE is one of its main exporting companies, surpassing cattle ranchers," he says.
However, he qualifies: "From that year until now no more renewable power has been installed and that is a big problem, because the economy has grown and the demand for energy has grown as well."
“We have to reintroduce renewable energy,” he remarks.
The second transition: the commitment to green hydrogen
In Uruguay, there is a consensus that the turnaround in the electricity sector has contributed significantly to decarbonizing the economy, but there are still many activities that are fueled by polluting fossil fuels.
Raúl Viñas, from the Movement for a Sustainable Uruguay, recalls that 40% of all the energy the country consumes comes from oil.
And he explains that half of CO2 emissions come from burning diesel, used in industry and in mobility, such as cargo trucks and buses.
“The energy transition has a very important duty in the transportation system,” says Viñas.
The second energy transformation promoted by the current Government aims precisely at this highly polluting sector, whose roadmap to 2040 proposes the local production of green hydrogen, an energy vector generated from the electrolysis of water through renewable sources, which is presented as a non-polluting alternative to the use of fossil fuels.
A man works at the biomass plant in Tacuarembó, Uruguay,Mariana Greif Etchebehere (Bloomberg)
"Uruguay is convinced that it has the conditions to be part of the hydrogen economy, with the aim of decarbonizing production by 2050," Industry Minister Omar Paganini told América Futura.
Currently, he indicates, the Uruguayan Government is evaluating a series of proposals to develop small-scale pilot projects, oriented to the applications of green hydrogen and derivatives, aimed at the domestic market, such as cargo transportation.
In parallel, Paganini continues, there is interest from international investors in carrying out larger-scale projects for export, focused on the production of alternative fuels derived from hydrogen, such as green methanol or sustainable aviation fuel.
“The government is looking for private investments that assume these risks,” he adds.
According to the roadmap, some of these risks are associated with the high costs of technology for the production of green hydrogen and the still slow adoption of this product by industries and countries.
Likewise, social barriers are mentioned, such as the low acceptance of logistics infrastructures in some areas of Uruguay.
"The road map talks about the availability of groundwater, when we don't have a measure of the amount of water we can extract," says Viñas.
The environmentalist shares this concern with the residents of Tambores, a small town in Tacuarembó (central-northern part of the country) where the German company Enertra plans to establish itself to produce green hydrogen and its derivatives.
If completed, the project will include the installation of wind and photovoltaic plants, as well as an on-site electrolyser, to produce 15,000 tons of green hydrogen per year.
There are doubts, Viñas insists, about the volume of drinking water that the electrolysis process will require, necessary to generate the product.
Minister Paganini considers that the use of water in these projects must be “demystified”, because they are the quantities -five liters per second- that any traditional national industry consumes.
“It is not a crazy consumption that can distort our aquifer base”, he concludes.
However, the debate on the use of water for the production of green hydrogen is not settled, not only here in Uruguay.
For the residents of Tambores, the issue goes even further: they argue that with this type of initiative the country deepens a "purely extractivist" model, which obtains natural resources from this area to transform and export them, without this having a positive impact on development. local sustainable