Southern Cone power watch: Uruguay exports and record demand, Argentina development plan

Uruguay exported US$222mn in electricity in 2022, said Silvia Emaldi, head of state power utility UTE.

Argentina was the main buyer, chiefly over the Southern Cone’s winter period.

Uruguay expects a dip in exports this year on account of weaker hydrological conditions, impacting domestic hydroelectric output.

In 2022, power from clean sources – hydroelectric plants and non-conventional renewables (NCRE) – covered 90% of demand in Uruguay, up from 83% in 2021. In terms of NCRE adoption, Uruguay has wind, biomass and solar plants. 

In 2021, Uruguay’s electricity exports were US$594mn amid an uptick in demand from neighbor Brazil, which was suffering a drought. Investment and trade promotion agency Uruguay XXI forecast at the time that power exports would drop in 2022 to US$297mn.

ALSO READ: How and when Uruguay plans to expand its power generation park

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Electric power demand in Uruguay climbed 3.1% in 2022, hitting a record 11.5TWh, local energy consultancy SEG Ingeniería tweeted, citing data from UTE.

In a May-October seasonal programing report, electricity market administrator and independent system operator Adme forecast demand upticks of 2.1% for 2023 and 3.3% for 2024.

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Improving finances within the electric power sector is Argentina’s initial barrier to strengthening the industry, a federal energy department document states.

The sector faces challenges across the spectrum, from generation and transport to distribution.

The first hurdles are in the “economic and financial aspects within the sector, linked to the reconstruction of the sector's income and the reduction of its dependence on contributions from the national treasury,” according to the report, which lays the foundations for multi-stakeholder discussion this year on a proposed electric power sector development plan.

Argentina’s electricity industry players have been impacted by headwinds including rate freezes, soaring inflation and limited access to financing, narrowing the scope for investment. Last year officials started a rate segmentation program to trim subsidies.

The report also envisages a bigger role for natural gas in non-residential supply and explores, among other areas, transmission, identified as the “principal barrier” to the incorporation of new capacity, given that in regions that export power, line capacity utilization is almost full.

The report can be accessed here, in Spanish.