Silent Revolution Shakes Uruguay’s Power Generation Industry
According to a report by Uruguay’s energy and Water Services Regulatory Unit (Ursea), the country has undergone a “quiet revolution” in its electricity generation model. it has structurally transformed into an almost fully renewable energy system that now serves as a global example.
Uruguay provides nearly 100 percent electricity coverage-99.9% in urban areas and 99.8% in rural regions-serving more than 1.6 million users. In the past, Uruguay relied heavily on oil, while its hydroelectric facilities where operating near maximum capacity.
This situation created energy vulnerabilities that hampered national advancement. Installed electrical generation capacity grew from 394 megawatts in 1965 to 5,299 megawatts by 2024-a more than thirteenfold increase.This transformation rests on a government-led vision, strong institutional coordination, and an innovative regulatory framework centered around long-term energy policies:
1- The 1997 Law, which laid the foundation for independent power production initiatives and authorized private-sector participation.
2- The 2006 Law, which marked a new phase allowing the state-owned company UTE to purchase up to 60 megawatts from renewable sources such as wind power, biomass, and small hydropower plants.
3- The 2010 Law, enabling microgenerators-including households and small businesses-to produce their own energy and feed surplus power back into the national grid. Uruguay’s renewable energy mix includes wind power, solar energy, biomass, hydropower, biofuels, and green hydrogen.
Despite current successes-on some days meeting total domestic demand with renewables alone and exporting surpluses to neighboring countries-the country faces challenges tied to the “second energy transition.” These include developing advanced storage solutions like batteries; strengthening Ursea’s regulatory role over new technologies; promoting electric transportation; smart grid implementation; regional market expansion; and planning for surplus energy exports.
