海角大神

Long before the Strait of Hormuz closed, this Latin American nation went green

Less than two decades ago, Uruguay was facing a predicament that would feel familiar to people in many countries today. Global oil prices were spiking. The small but growing country鈥檚 economy now depended on more imported fossil fuels to meet rising demands for electricity.聽

The weather at the time wasn鈥檛 helping either. Drought conditions in 2008-09 meant that Uruguay鈥檚 hydropower plants were falling short. Power outages were a problem, and so was the skyrocketing price of electricity for consumers.聽

The situation was 鈥渁 nightmare,鈥� says Ram贸n M茅ndez Galain, the man who was tapped by the government in 2008 to lead Uruguay out of the crisis as energy secretary.聽

Dr. M茅ndez, a particle physicist with years of experience working on nuclear energy technology, 鈥渨as the closest thing to a nuclear engineer in the country.鈥澛�

鈥淚 rapidly understood that this was not the solution for us,鈥� Dr. M茅ndez says. Thanks in no small part to his vision, renewables became the focus of Uruguay鈥檚 remarkable energy transformation.聽

These days, up to 98% of Uruguay鈥檚 electricity comes from a combination of wind, solar, hydropower, and biomass. The nation of about 3.4 million people even exports surplus energy to neighboring Argentina and Brazil.

Discussions around energy transitions today tend to frame the move as an environmental issue, but in Uruguay in the 2000s, the concern was primarily energy sovereignty. The country鈥檚 green transformation could hold some clues for others looking to reduce their reliance on fossil fuels, as a newly volatile energy market due to the Iran war has driven up oil and gas prices in the United States, Europe, and beyond.

鈥淚t was a tsunami,鈥� says Jos茅 Cataldo, a professor at the University of the Republic in Montevideo who was responsible for the country鈥檚 pilot wind project in the early 2000s. 鈥淲e added 1,500 megawatts of wind power,鈥� he says. That is roughly enough energy to power almost every household in Uruguay.聽

Renewables drive economic growth聽

Part of what made this transition possible in Uruguay was the consensus among its four main political parties. An agreement brokered in 2010, when Jos茅 鈥淧epe鈥� Mujica was president, ensured that energy policy would not change with each new government.

鈥淭his was the most important, the definition of a long-term state policy,鈥� says Marcelo Mula, vice president of the Uruguayan Association for Renewable Energy (AUDER).

Uruguay鈥檚 success is replicable in other countries, he says, if they can establish the same kind of broad political agreement. But that is no easy feat.聽

鈥淓ach country has a driver that makes [adopting renewables] interesting beyond the climate issue,鈥� says Dr. M茅ndez, who founded a nongovernmental organization that advises other governments about how to follow in Uruguay鈥檚 footsteps. Mexico, for example, is heavily reliant on imports of natural gas from the U.S.

Under Dr. M茅ndez鈥檚 leadership as energy secretary from 2008 to 2015, Uruguay ended its dependence on fossil fuels for electricity production by investing in renewable energy plants, especially wind turbines. On a recent windy weekday, for example, 56% of the country鈥檚 electricity was coming from wind power, 13% from solar, 17% from biomass, and 14% from hydropower.

The switch to renewables brought down the costs of electricity production, created 50,000 new jobs, and more recently attracted companies looking to reduce their emissions, such as Google.聽

鈥淭he transition [had] a tremendously positive impact on the whole economy, not just the power sector,鈥� says Dr. M茅ndez.

But the positive impression was not universally felt when the move toward renewable energy began. For Dr. Cataldo, who worked on mapping Uruguay鈥檚 wind potential before anyone thought renewables were an option, the biggest challenge was changing people鈥檚 minds.

鈥淭here were some meetings where people would look at me with a face that said, 鈥楾his guy is crazy,鈥欌�� he remembers.

Adriana Inthamoussu, born in the 1970s, remembers the blackouts in Uruguay鈥檚 past. 鈥淲e had to go to bed early,鈥� she recalls while waiting to plug in her car 鈥� a Chinese model 鈥� at an electric-vehicle charging point near Montevideo鈥檚 La Rambla promenade. 鈥淭hat doesn鈥檛 happen anymore.鈥�

鈥淚t was something brand new鈥澛�

Uruguay helped set the conditions for renewable energy plants to compete with traditional energy sources by adapting policy and government regulations. Most of the new investment came from the private sector, as the state didn鈥檛 have the resources to fund a $7 billion transition.聽

Private companies built the wind farms and signed contracts to sell power to the state-owned utilities company, UTE, which controls electricity distribution here. Long-term contracts at fixed prices helped make the arrangement attractive, Mr. Mula says.聽

鈥淚t was something brand new. Uruguay didn鈥檛 have the knowledge of how to build such big wind and solar farms, but we did in just a few years,鈥� explains Mr. Mula, who worked for UTE during the first years of the transition and later co-founded an energy consultancy.

A common barrier to adopting renewables worldwide is the intermittent nature of solar and wind power. Batteries are one way of getting around this. But Uruguay took another route, by combining diverse energy sources and using its established, and more consistent, source of hydropower as a 鈥渂ig battery,鈥� says Mr. Mula.

鈥淲e use biomass, wind, and sun the whole time. If there is no wind or sun, we use the reserves from the hydroelectric dams. If for some reason, there isn鈥檛 any water, our third backup is the gas-fired power plants,鈥� he says.

Uruguay鈥檚 energy wins do come with costs for consumers. Ms. Inthamoussu, who鈥檚 back charging her EV, says she sees the clean electricity matrix as something positive. But she also has a common complaint about her electricity bill: 鈥淎t home, I pay more than 4,000 pesos [$100], it鈥檚 extremely expensive.鈥�

That is because the government decided not to pass on the entire reduction in energy costs to consumers. Instead, it is keeping UTE鈥檚 revenue as a source of state revenue.

Uruguay is now going through a second energy transition: adding more solar power, decarbonizing its primary energy matrix, and working toward producing new clean energy sources, such as green hydrogen. Yet on the streets of Montevideo, where EVs are ubiquitous, most Uruguayans aren鈥檛 fully aware that their country is seen as a model internationally.

鈥淚 know we have [hydroelectric] dams, and when you head out of Montevideo, you can see the big turbines, but I don鈥檛 actually know how efficient they are,鈥� says Keila Trinidad, a real estate agent who drives an electric car because it鈥檚 cheaper.聽

But that is why renewables make sense, argues Dr. M茅ndez. Even before the Iran war, they were much cheaper than fossil fuels, he says 鈥� and that is what people really care about.