Uruguay’s Remarkable Success in Balancing Energy Supply and Demand

Uruguay, a small South American country with a population of just over 3.4 million, has achieved an impressive level of energy security and sustainability by effectively balancing its energy supply and demand. Through strong government policies, investment in renewable energy sources, and a diversified energy mix, Uruguay has become a shining example of how to develop a sustainable and secure energy system.


One of the key factors behind Uruguay’s success in the energy sector is its commitment to developing a sustainable and secure energy system. In 2005, the government launched a long-term energy policy aimed at reducing the country’s dependence on imported oil and increasing the share of renewable energy in the energy mix. This policy has resulted in significant investments in renewable energy projects, particularly in wind and solar power.

Uruguay’s investment in renewable energy has paid off, with the country now boasting one of the highest shares of renewable energy in its electricity generation mix in the world. In 2019, according to data from the International Renewable Energy Agency (IRENA), renewable energy sources accounted for an impressive 97.5% of Uruguay’s electricity generation. This achievement is even more remarkable when considering that just a decade ago, the country heavily relied on imported oil for its energy needs.

Wind power has been a major driver of Uruguay’s renewable energy success. The country has experienced rapid growth in wind energy capacity, with the total installed capacity increasing from just 50 MW in 2010 to over 1,600 MW in 2019. This growth has been facilitated by a favorable regulatory environment, including tax incentives for renewable energy projects and a feed-in tariff system that guarantees a fixed price for electricity generated from renewable sources.

Solar energy has also made significant progress in Uruguay. The country’s solar capacity has grown from virtually zero in 2010 to over 250 MW in 2019. Government policies, such as tax incentives and a net metering scheme that allows consumers to sell excess solar electricity back to the grid, have supported this growth.

Uruguay’s success in balancing supply and demand is further attributed to its diversified energy mix. The country’s electricity generation relies on a combination of hydropower, wind, solar, biomass, and a small share of natural gas and oil. This diverse mix of energy sources ensures a stable and secure energy supply, even during periods of low rainfall that can impact hydropower generation.

Furthermore, Uruguay has invested in strengthening its energy infrastructure, including the construction and expansion of transmission lines. This has improved the reliability of the electricity grid and reduced the risk of blackouts. Additionally, the country has integrated its energy market with neighboring countries, particularly Argentina and Brazil, through the construction of interconnection lines. This regional integration allows Uruguay to export surplus electricity, further contributing to the stability of its energy system.

Uruguay’s remarkable success in balancing its energy supply and demand serves as an example for other nations seeking to develop a sustainable and secure energy system. By continuing to invest in renewable energy and strengthen its energy infrastructure, Uruguay is well-positioned to maintain its leadership in the global energy market.