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Uruguay has shifted to getting 95% of its electricity from renewables in less than 10 years

Rest of the world, take note.

FIONA MACDONALD
4 DEC 2015
 

At the climate summit in Paris this week, the South American nation of Uruguay has announced that it gets an enviable 94.5 percent of its electricity from renewable energy sources, such as wind and solar. And they've done it without government subsidies or raising the price for consumers.

In fact, electricity prices are now cheaper than they've ever been for the 3.4 million people living in Uruguay, which eliminates one of the main excuses people have for not being able to transition away from fossil fuels: it costs too much

 

And before you say that such a dramatic shift isn't feasible for larger economies, Uruguay has made the transition without any crazy new technology or radical investment.

In fact, national director of energy, Ramón Méndez, told the climate summit delegates that the formula is incredibly replicable, and is simply a result of: "clear decision-making, a supportive regulatory environment and a strong partnership between the public and private sector".

See? Anyone can do it.

"What we’ve learned is that renewables is just a financial business," said Méndez. "The construction and maintenance costs are low, so as long as you give investors a secure environment, it is a very attractive."

One of the biggest changes over the past 10 years is how many wind farms have popped up all over the countryside, with wind energy now providing the largest portion of electricity. Uruguay is naturally a pretty windy place, which is attractive to wind energy companies, but what's been even more appealing is that the country has offered foreign investors a fixed state utility price for 20 years.

"As a result, foreign firms are lining up to secure wind farm contracts," writes Jonathan Watts for The Guardian. "The competition is pushing down bids, cutting electricity generating costs by more than 30 percent over the past three years."

But perhaps what's most unique about the Uruguayan model is that they've kept their mix of renewables incredibly diverse, steering clear of relying heavily on one form of energy generation over another. This means that they're better able to withstand changes to the climate, with Méndez explaining that by having wind farms feed into hydro plants, they've been able to reduce their vulnerability to drought by 70 percent.

Of course, things aren't perfect. While 95 percent of Uruguay's electricity comes from renewable sources, that's not the only sector in the country that uses energy. The transport sector, for example, is still reliant on oil. So when you look at the energy use of the country as a whole, adding the transport sector into the mix, renewables only provide 55 percent, with oil still makes up the other 45 percent.

However, that's still pretty impressive when you consider the fact that 15 years ago, oil accounted for 27 percent of Uruguay's imports. And if you look at the worldwide total energy breakdown, only 12 percent comes from renewables on average.

Uruguay is now hoping to make changes in its transport sector too, and it's moving quickly once again. As part of the climate summit, Méndez pledged to cut Uruguay's carbon emissions by 88 percent in the next two years compared to 2009 to 13 – it's one of the most ambitious nation pledges so far, and proves that Uruguay is serious about reducing its impact on the planet.

But despite all the environmental perks, the bottom line is that transitioning to renewable energy sources makes financial sense for countries, and it's safe to say that Uruguay is now killing it.

"For three years we haven’t imported a single kilowatt hour," said Méndez. "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."

Watch and learn people, watch and learn.

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