Winds of Change: Uruguay’s Sustainable Energy Plans
The weighty challenge the Uruguayan government faces in securing sufficient energy supplies was brought into stark relief as a dispute began in July 2011 between Argentina and Paraguay over the sale of Paraguayan electricity to Uruguay. During this ongoing impasse between its neighbors, the Uruguayan government has expressed its frustration over Argentine President Cristina Fernández de Kirchner’s refusal to allow the transportation of surplus Paraguayan electricity to Uruguay via the Argentine power grid. Uruguay and Paraguay claim that the Fernández de Kirchner administration effectively blocks such a transfer by charging almost five times the prevailing regional rate of USD 10 per Megawatt (MW) hour for power transmitted through the Argentine grid, because Argentina wishes to maintain its status as the sole purchaser of Paraguayan surplus power. Prompted by this disagreement, in July 2011 Paraguayan delegates at the Mercado Común del Sur(Mercosur) Parliament called on Argentina to pay more for the surplus energy generated from Yacyretá, Argentina and Paraguay’s shared hydroelectric dam. The delegates went on to describe the current situation as “a brilliant deal for our partner [Argentina] and a heavy burden for Paraguayan national interest [to have to bear].»
While this latest dispute is illustrative of apparent difficulties in the relationship between Paraguay, Uruguay, and Argentina, it also highlights the important challenge that Latin American nations confront in securing sufficient energy supplies. As a country with limited hydrocarbon energy resources, Uruguay faces the difficult task of ensuring its supply will continue to meet demand in the future. Nevertheless, the nation is now in the process of establishing the foundations for the production of viable, clean, and cheap sources of energy that will reduce reliance on foreign energy imports. Uruguay is attempting to secure its future through a progressive policy based on sustainability and self-sufficiency, which would be step towards making it a leader in sustainable Latin American energy security. Uruguay’s plan provides a potential model for its neighbors, which tend to sacrifice environmental issues in prioritizing economic development.
This analysis was prepared by COHA Research Associate Liam Whittington.
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