How and when Uruguay plans to expand its power generation park

Uruguay aims to start expanding its power generation park earlier than originally planned, state electricity company UTE chair Silvia Emaldi said.

Officials want to begin growing installed capacity from 2026, initially via construction of 100MW solar PV modules. 

UTE had originally said the objective was to start adding solar capacity from 2028.

A buildout of natural gas generation capacity, via 60MW modules, is planned to start in 2031, to help stabilize the grid amid increased participation of renewables. This is due to be followed by new wind capacity – via 50MW modules – from 2032, according to a UTE presentation given at industry event VIII Congreso LATAM Renovables, hosted by local renewables chamber Auder.  

Around 18 solar PV modules, 20 natural gas modules and 60 wind modules are expected to be built by 2047. 

UTE is also working on plans for its first energy storage installation. Also, to decarbonize thermoelectric plants, future adoption of synthetic fuels derived from green hydrogen or use of natural gas-green hydrogen blends is being mulled.  

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“Regarding the 100MW modules that will start to be incorporated from 2026 it is considered, in these projections, that they will be carried out via [power-purchase agreements], PPAs, like with what we have already,” Emaldi said.

Uruguay gets around 47% of its electricity from solar and wind, making it the second biggest solar and wind player globally by share after Denmark, which gets just over half of its power from the renewable energy sources. Uruguay's installed capacity last year stood at 4,928MW, according to preliminary national energy report data. Wind and hydro each accounted for 31%, thermoelectric 24%, biomass 9% and solar 5%. 

Power demand is growing in the country, said Emaldi. “In recent years, including during the pandemic, demand … has grown around 2.5% and for the coming years growth of about 3% is forecast.”

Electrification of the productive sector and homes, including electromobility, is seen as a key future driver. UTE hopes to expand the number of electric vehicle charging points to 300 by the end of 2023, up from 142 in June this year.

Over the next decade, demand growth is expected to spike 3.3% in both 2024 and 2026, according to forecasts from power market administrator Adme. Demand is due to climb 2.6% this year to 11,492GWh. 

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During the conference, energy and mining minister Omar Paganini said officials were reviewing sector regulations, with a focus on identifying hurdles to private investment in both power generation and green hydrogen, a nascent sector the country is betting on. Paganini added that authorities were also working in the area of energy integration, seen as vital to supporting decarbonization efforts in the region. Uruguay has power transmission and natural gas pipeline links with neighbors Brazil and Argentina, the latter working to ramp up natural gas output.  

URUGUAY’S FIVE-YEAR PLAN

Uruguay’s 2023-27 energy plan involves US$1.1bn in outlay by UTE, with generation, transmission and distribution accounting for US$137mn, US$210mn and US$543mn, respectively. Other projects are transmission initiatives Cardal (US$59mn) and the US$220mn North Transmission Ring, both involving private sector backers. 

UTE’s generation outlay corresponds to an overhaul of the 108MW Rincón de Baygorria hydroelectric power station, due to start next year, and a 30MW UTE solar plant being built in Punta del Tigre, scheduled to come online next year.