[ Stung by the 2008 oil price spike, Uruguay now produces up to
98% of its electricity from renewables. Can other countries follow
suit?]
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URUGUAY’S GREEN POWER REVOLUTION: RAPID SHIFT TO WIND SHOWS THE
WORLD HOW IT’S DONE  
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Sam Meadows
December 27, 2023
The Guardian
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_ Stung by the 2008 oil price spike, Uruguay now produces up to 98%
of its electricity from renewables. Can other countries follow suit? _


A wind farm in Florida, Uruguay. Up to 98% of the country's power
comes from renewables., Photograph: Alessandro Cinque

 

It was the 2000s, and fossil fuel prices were rising worldwide. After
a period of volatility in the 1980s, the crude oil price per barrel
had reached one its lowest points – $20 – at the end of 2001 but
then, over the course of six years, it tripled before a new oil shock
saw prices surpass those of the 1970s, reaching a record $145 a
barrel on 3 July 2008
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Uruguay imports its oil, so it had a problem. Demand for energy in the
country had grown by 8.4% the previous year and household energy bills
were increasing at a similar rate. The 3.4 million-strong population
was becoming restless. Lacking alternatives, President Tabaré
Vázquez was forced to buy energy from neighbouring states
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higher prices, even though Argentina, Uruguay and Paraguay had a
mutual aid agreement in case of emergency conditions
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To escape the trap, Vázquez needed rapid solutions. He turned to an
unlikely source: Ramón Méndez Galain
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physicist who would transform the country’s energy grid into one of
the cleanest in the world.

Today, the country has almost phased out fossil fuels in electricity
production. Depending on the weather, anything between 90% and 95% of
its power comes from renewables
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In some years, that number has crept as high as 98%.

Phasing out fossil fuels
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a central issue at Cop28. After a week of tense negotiations in Dubai,
countries agreed to transition away from fossil fuels within energy
systems
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but campaigners, governments and environmental experts continue to
debate how to make that transition.

[Ramón Méndez Galain stands at a speaker’s podium.]

Physicist Ramón Méndez Galain: ‘I thought I could understand a
little about this problem.’

One answer could lie in what Uruguay
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decade and a half.

“I had been working abroad for 14 years, and when I came back, there
was this energy crisis, but the only solution people were giving was
to install a nuclear power plant – that was it,” Galain remembers.
“I was a nuclear physicist, so I thought I could understand a little
about this problem.”

The more Galain researched the issue, the more he became convinced
that nuclear power was not the answer for Uruguay. Instead, he argued,
it was renewables. He published his findings in a paper that laid out
his belief that the country should go all in on wind power. Soon
after, he received a phone call inviting him to become Uruguay’s
energy secretary and to implement his plan.

“Imagine my surprise,” Galain says. “This was crazy. But I did
something even more crazy: I accepted.”

Uruguay is a small country – about 26% smaller than the UK by area
– wedged between two giants. Argentina’s sprawling capital, Buenos
Aires, lies 31 miles (50km) south of the mouth of the Rio Plata, which
forms part of the border between the two countries, while Uruguay
shares its northern border with Brazil.

In this context, the country is easily overlooked. However,
economically it is a South American success story. Its GDP per capita
was £16,420 in 2022
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according to the World Bank, the highest on the continent; only a tiny
fraction of its population lives in extreme poverty. The country has
a burgeoning middle class – accounting for about 60% of the
population
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are high expectations for lifestyle and opportunities.

Such demographic change has driven demand for the trappings of a
contemporary, 21st-century lifestyle. Homes are fitted with washing
machines and dishwashers, and air conditioning units have become
commonplace, as have vast flat-screen TVs and connected devices.

[Aerial shot of Montevideo City at night.]

Montevideo City at night. With a burgeoning middle class, there has
been growing demand for goods powered by electricity. Photograph:
Alessandro Cinque

All of that requires power. Over the course of about a decade,
Uruguay, under the stewardship of Galain, installed about 50 windfarms
across the country, decarbonised the grid and bolstered its
hydropower.

The biggest challenge, however, was to change the “narrative”
about renewables. Back then, sustainable energies were still
surrounded by many misconceptions, says Galain: they were too
expensive, too intermittent or would raise unemployment – and
changing these stories proved vital to getting buy-in from all levels
of society.

“No one believed we could do it. We needed new solutions. We needed
to do things differently,” he says. “Today, even members of that
cabinet say to me: ‘When you were saying those things on TV in 2008,
we were thinking, how are we going to explain this when we fail?’”

Galain says there needed to be a “strong national narrative” to
make it work. “I told people this was the best option even if they
don’t believe climate change exists. It’s the cheapest and not
dependent on crazy fluctuations [in oil prices].”

With that narrative, the government set about winning over a sceptical
populace. One initial concern was that jobs would be lost in the
energy sector. Instead, about 50,000 new jobs were created
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a large number in a country with such a small population. The idea of
a “just transition”, in which nobody was left behind, became
central
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and some workers were offered places on retraining schemes to adapt to
the new normal.

[Two workers in harnesses on ropes inspect a wind turbine.]

Workers were offered retraining schemes to adapt to the green
revolution. Photograph: Alessandro Cinque

Others were able to play the changes to their advantage. Santiago
Ravello, 52, owns a beef farm in central Uruguay, about 175 miles
north of the capital, Montevideo. Beef production is a primary
industry across the country, owing to its vast swathes of grasslands.

In 2009, the Ravello family was debating whether to sell its farm.
That was when Ravello met Fernando Schaich, who ran what was
previously a small energy-efficiency consultancy, and had learned
about the country’s transition to renewables.

Schaich had spotted an opportunity in the transition plan early on.
His company had previously made its money by advising businesses on
how they could cut their energy usage, but it moved into windfarm
development. He told Ravello that his family’s farm could be a site
for an onshore windfarm – and that building one need not affect his
cattle.

The pair prepared a bid for a contract and went to a developer, but
lost. “Fernando was gutted by this,” Ravello says. “He told me:
‘You can go with another company.’ But he had always been honest
with me, so I told him: ‘It’s not all about money.’”

Today, Ravello’s farm is home to 22 wind turbines, a side business
that gives the family a healthy source of income.

[Two men ride horses along a track on a plain, in the background are
several wind turbines.]

Beef production is a primary industry across the country and some
farmers have added windfarms to their land. Photograph: Alessandro
Cinque

Uruguay’s green transition has not been without its challenges,
however. One was logistics, according to Gonzalo Casaravilla, who
served as president of the state energy company UTE between 2010 and
2020.

Outside cities, Uruguay’s roads are small, with few motorways. The
parts of wind turbines are anything but small, and moving them into
position a difficult undertaking. This was achieved by means of
rolling roadblocks and convoys to create minimum disruption when new
windfarm projects were built.

“It was funny. In the beginning, the technical people in my company
were saying: ‘Whoa, be careful.’ A year and a half later, they
said: ‘OK, it’s a good idea,” says Casaravilla. “There was
friction at the beginning, but then it was the best team we could have
had.”

[A windfarm outside Montevideo seen at dusk.]

A windfarm outside Montevideo seen at dusk. Photograph: Alessandro
Cinque

The transition has not been universally popular. There are occasional
grumbles from people who wonder why their energy bills have not fallen
if renewable energy is “free”. This is a complaint that Galain
shrugs off. “People are wondering what happened and why their bill
isn’t lower,” he says. “But in that same time period, we had 40%
poverty; now it’s 10%, and extreme poverty has almost disappeared.

“People now have air conditioning that they didn’t have before,
using more and more electricity.”

Xavier Costantini, a partner at the consultancy McKinsey, based in
Montevideo, says that the idea that renewable energy is free is a
misconception. There are maintenance costs – although relatively
modest – but crucially, the initial investment needs to be paid
back.

The question of whether Uruguay’s transition provides a vital
blueprint for the world is not a simple one. Some characteristics gave
the country an advantage, Costantini says. It is “blessed by
nature” with strong winds and considerable hydropower, which is
sometimes sold to Brazil when in surplus.

An alternative energy source such as hydropower is vital to plug gaps
in a renewable grid as wind and solar are intermittent.

[Shot of a long line of wind turbines stretching into the distance.]

Uruguay is blessed with strong winds. Photograph: Alessandro Cinque

Unlike some countries in the region, Uruguay is very stable
politically, which made investing for the long term much more
palatable for foreign companies, Costantini says. It also had
relatively high tax rates on imports, a lever it was able to use to
encourage foreign investment.

However, such conditions can be found elsewhere. In the UK, for
example, Scotland has considerable hydropower potential. “Full
decarbonisation is expensive, but you could get to a high level of
decarbonisation,” Costantini says. “I’d say by the end of the
next decade, there’s certainly [scope] for a country such as the UK
to have a highly decarbonised grid at a very cost-competitive rate.”

Uruguay, meanwhile, has moved on to what is becoming known as the
second stage of its transition. It is gradually moving its buses and
public vehicles over to electric, and incentivising taxi and minicab
drivers to switch. How well this works could provide a global roadmap
for how other countries can decarbonise their economies.

_Sam Meadows is a news and features reporter focused on climate
change, money and social affairs. He is currently based in South
America._

* wind power
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* Uruguay
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* Climate Change
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* Renewable energy
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