They made the switch in less than a decade. Why haven’t we?
Uruguay, a small country with a population of just 3.4 million people, is a world leader when it comes to renewable energy. Over the last ten years, Uruguay undertook the task of switching from fossil fuels to renewable energy for its electricity production, and today, an impressive 94.5 percent of the country’s power comes from renewables.
Just 15 years ago, oil accounted for 27 percent of Uruguay’s imports, and a new pipeline was just about to begin supplying natural gas from Argentina. Now, the majority of its power, 55 percent of the total energy mix, comes from wind turbines and hydroelectric, along with solar and biomass facilities that are continuing to grow and expand.
Amazingly, they did it without government subsidies or higher consumer costs. In fact, electricity prices are cheaper than they have ever been.
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Uruguay managed to keep its electricity mix highly diverse in order to not rely heavily on one form of electricity generation. Due to this, they have fewer power cuts, are better equipped to handle a changing climate, and are less susceptible to droughts.
The transition to renewables was not that difficult — there were no technological miracles or radical investments. According to the country’s head of climate change policy, Ramon Mendez, it came down to clear decision-making, a supportive regulatory environment, and a strong partnership between the public and private sectors.
“What we’ve learned is that renewables is just a financial business,” Méndez said. “The construction and maintenance costs are low, so as long as you give investors a secure environment, it is a very attractive.”
Investment in renewable energy in Uruguay has increased to seven billion dollars, or 15 percent of the country’s annual GDP. The country is guaranteeing a 20-year fixed state utility price for electricity generation using wind power, which is very appealing to foreign investors. As a result, companies are lining up to secure wind farm contracts. This competition is pushing down bids and has cut electricity generation costs by more than 30 percent over the last three years.
Uruguay still has a transportation sector dependent on oil, but they hope to make changes very soon. As part of the Paris climate summit, Méndez pledged to cut Uruguay’s carbon emissions by 88 percent over the next two years — the most ambitious by any country so far. And why not? Uruguay is making a lot of money transitioning to renewable energy.
"For three years we haven’t imported a single kilowatt hour," Méndez told The Guardian. "We used to be reliant on electricity imports from Argentina, but now we export to them. Last summer, we sold a third of our power generation to them."
Bravo Uruguay.
What do you say? If Uruguay can do it, so can we!
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