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Uruguay is now generating 95% of its electricity from renewable energy

Reuters/Bruno Kelly
Published Last updated This article is more than 2 years old.

World leaders will spend much of next week’s climate change summit in Paris wrangling over the terms of a deal to fight global warming. But if the tiny nation of Uruguay is any indication, switching to a low-carbon lifestyle isn’t as difficult as it might seem.

The Guardian reports that renewable energy now powers 95% of electricity in Uruguay. The country relies on a mixture of energy resources including wind turbines, solar power, hydropower, and biomass. Taken together, renewable energy now makes up 55% of Uruguay’s energy mix–far outshining the global average of 12%, according to the Guardian.

Uruguay’s achievements are all the more impressive for happening in a remarkably short amount of time. Its government approved a sweeping 25-year energy policy in 2008. What’s more, the country has proven that switching to clean energy doesn’t have to result in higher prices for consumers. Inflation-adjusted electricity prices today are actually lower than they were before, according to the country’s head of climate change policy, Ramón Méndez.

So what’s the secret to Uruguay’s success? Méndez points to several factors.

One is a strong partnership between Uruguay’s public and private companies. Uruguay’s state-owned national electric company promotes renewable energy by auctioning power purchase agreements to private firms, according to a 2015 report by the International Renewable Energy Agency (IRENA), an intergovernmental organization.

Multipartisan support was also crucial to getting Uruguay’s clean energy policy off the ground. It was endorsed by all political parties in Congress back in 2010, according to IRENA.

Méndez further attributes Uruguay’s success to the fact that investors have discovered clean energy makes good business sense. Uruguay’s state utility guarantees fixed energy prices for 20 years, which has encouraged foreign companies like the German wind power firm Enercon to build plants.

“What we’ve learned is that renewables is just a financial business,” Méndez tells the Guardian. “The construction and maintenance costs are low, so as long as you give investors a secure environment, it is very attractive.”

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