Uruguay aims to be world wind leader by 2015

BUENOS AIRES -- Just across the Rio de la Plata from Argentina, Uruguay is aiming to become a world leader in wind and other renewable energy by 2015. Can it meet such an aggressive timetable?
Written by Ian Mount, Correspondent (Buenos Aires)

BUENOS AIRES -- Just across the Río de la Plata from Buenos Aires, the tiny country of Uruguay is probably best known for the flood of celebrities and anonymous rich who swarm its Punta del Este beach resort every January, as well as for the amusing fact that its human population (3.4 million) is outnumbered by its cattle herd (11.1 million) by a factor of more than 3:1. But within three years, this beef-eater's paradise of rolling hills and eucalyptus plantations hopes to be known for something entirely different: its role as the world's biggest producer of wind power and one of the planet's greenest countries.

The president of the UTE state electric company, Gonzalo Casaravilla, and the national energy director in the country's energy ministry, Ramón Méndez, recently announced that the electrical company had signed contracts to buy electricity from some 20 to-be-constructed private wind farms and that by 2015, 90% of Uruguay's electrical generation would come from renewable sources: 45% from hydro power, 15% from biomass, and 30% from wind. That would put Uruguay ahead of the world's current wind leader, Denmark, which today gets 26% of its electrical generation from wind, says Gregory Keoleian, director of the Center for Sustainable Systems at the University of Michigan. "It's impressive, definitely," Keoleian says.

Getting there in such a short timeframe could be difficult, however.

The push to increase Uruguay's use of renewable energy sources is part of a 25-year national energy plan that was designed in 2008 to reduce Uruguay's dependence on commodities and lower its energy costs, national energy director Méndez told SmartPlanet. Between 2010 and 2015, the country expects investments of some $7 billion in its energy infrastructure. "That's a huge number for Uruguay, some 17% of annual GDP," Méndez says.

Because of its number of rivers, South America is already one of the greenest regions in the world in terms of electrical generation. Brazil gets 78% of its electricity from hydroelectric generation while Venezuela gets 65%, compared to a world average of 16%, notes Michigan's Keoleian. But the problem with hydro power is that it is dependent on climatic conditions; during dry periods, it doesn't work. "There are times in the year when all the hydro generation effectively is off line, and our costs spike," says Méndez.

When that happens, Uruguay has to buy electricity from its neighbors, and that's expensive for a small country. Uruguay's average electricity generation cost is $90/megawatt-hour (MWh), but when it buys energy from Argentina it pays some $200-400/MWh, Méndez says. Hence the interest in wind power in Uruguay, where the breeze is fairly constant and the sparse population means fewer people to complain about views ruined by wind farms.

After what Méndez calls a four-year "apprenticeship" in wind energy, the country recently took international bids for wind farms. The average price of the more than 26 bids it received was some $62-64/MWh, he says, and the country expects $1.8 billion to be invested in the wind farms between now and 2015 to get to the 2015 goal of 1,000 MW in wind production.

While getting to 30% wind energy in electrical generation would lead to significant electrical generation cost savings for Uruguay, the 2015 deadline will be a demanding one to meet. Right now, the country produces less than 50 MW in wind energy, and reaching 1,000 MW will require the installation of some 500 wine turbines, Méndez says.

"Whether Uruguay can commission that many wind plants in this time frame is another matter. It’s an aggressive schedule and tough to realize," says John Byrne, who heads the Center for Energy and Environmental Policy at the University of Delaware. "A lot of the equipment would have to be bought from European and Asian markets and once the turbines are there, installation can be six months to two years."

For his part, Méndez rejects any doubt about the on-time completion of the plan. "We have no doubts. This isn’t just a decision taken in an office somewhere, but rather something we’ve been working on for a number of years," he says. According to Méndez, contracts have been signed for 90% of the parks, 80% have completed all the required permits, a half dozen have already started construction, and the rest will begin in the first six months of 2013.

Photo by Jimmy Baikovicius/Flickr.

This post was originally published on Smartplanet.com

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