IEEJ:August 2015

Uruguay
2015
Paula Cobas

Energy Policy CourseTokio, 2015

Content• Uruguay: general facts• Energy Policy 2010 - 2030: guidelines, goals andimplementation• Energy Supply and Demand• Energy Outlook• Challenges ahead

Uruguay: general facts• Total extension of 176.000 Km2• Total population 3.440.157
 half lives in Montevideo• Official language: Spanish• Money: Uruguayan peso
 1USD= 27 UYU*
• Climate: subtropical• Life expectancy: 78 for women and 73 for men• Literacy rate 98%*June 2015.

Source: Google maps

Uruguayan economy
GDP growth rate

• GDP growth 3,5% in 2014
 average 2004-2014: 5%
 GDP per capita 16.800 USD

7.8%

5.2%

• Unemployment: 6,5%
• Social indicators
 access to electricity: 99%
 access to drinking water: 98%

5.1%

4.2%
3.5%

3.3%

2009

2010

2011

2012

Source: Central Bank of Uruguay

2013

2014

• Productive activities: agriculture (soy and cereals) cattle and related industries (meat and wool processing mainly)
 forestry
 dairy industry
 tourism

Energy background: oil and rain dependence
Structure of Uruguayan Imports
1%
18%

19%

2%
24%

18%

15%

24%

26%

17%

18%

23%

23%

17%

15%

41%

42%

38%

41%

41%

2010

2011

2012

2013

2014

23%
13%

Other inputs

CapitalOil and oil productsElectricityConsumption• Not proven reserves of oil,natural gas or coal
• 4 Hydropower plants• Thermal generation:
Imported fossil fuels :high vulnerability

Source: Central Bank of Uruguay• Imports of oil in 2014:
1929 ktoe of oil and 615 ktoe of oil products
2054 million USD (18% of total imports)• Oil imports varies with each year´s rainfallEnergy Policy 2010- 2030: Guidelines
I. Institutional:
Government’s role aspolicy director
 Coordination
 Regulation
 Stable regulatory
framework

II. Supply:
Diversification withnational component
 Reduce oil dependence Increase renewableauthoctonus sources
 Capacity building

III. Demand:
Energy efficiency
 In all sectors
 Regulatory
framework Fundingmechanisms

IV. Social:
Energy policy as a social
policy: Adequate energy
access (security andprice) Tool for social
integration

Energy Policy 2010 - 2030: Goals

Short term
(2015)

Medium term
(2020)Long term(2030)

SupplyDemand50% of renewableenergy in the global
primary energy
matrixDecrease of 15% in
oil consumption in
the transport sector

Optimal use ofrenewable energy
and natural gas inenergy matrix isachieved

Decrease of 20% inenergyconsumption due toenergy efficiency
measures

At least 10.000
million USD savings
due to source
substitution andenergy efficiency

Energy intensity of
the country isplaced among thebest in the world

Social100% rural
electrification

Adequate access for
all citizens

Energy Policy 2010 - 2030: implementation
 Wind:• 532 MW of generation capacity installed and delivering• By 2015: additional 470 MW are expected to be operative• Competitive bidding process (prices of 65-80 USD/MWh)• 20 years power purchase agreements
 Solar• Thermal: capacity in operation of 14 m3 by 1000 inhabitants• Photovoltaic :• first plant installed in 2014: 486 KWp• 3.4 MW of micro-generation installed capacity (less than 150 kw)• by 2016 is expected to become operative 240 MW of installedcapacity of large scale solar farms• Competitive bidding process (around 90 USD/MWh) and 20 years
power purchase agreements

Energy Policy 2010 - 2030: implementation
 Biomass heat and power• 33% participation in primary energy matrix (wood and forestry)• 410 MW of installed power generation capacity by 2014
• 10 generation plants• Feed-in-tariffs (around 110 USD/MW)• 20 year period power purchase agreements

 Biofuels• Produced in Uruguay since 2010, mainly for transport use• Installed capacity for ethanol is 95.000 ton/year from sugar cane
• Installed capacity for Biodiesel 90.000 ton/year, mainly from soy• Currently• 5% mix of ethanol in gasoline, and it is expected to increase to 10% by2015,• 7% mix of biodiesel in Gas OilEnergy Policy 2010 - 2030: implementation
 Energy Efficiency• Energy efficiency law• Tax incentives for hybrid and electric cars
• Incandescent Lighting Replacement: 2.3 million light bulbs• Labelling program: water heaters, refrigerators and air conditioningsystems

 Hydrocarbons• Exploration projects are being conducted since 2009,both onshore and offshore• Construction of a regasification plant is under development• Terminal operative by 2016• Storage capacity of 267.000 m3 of LNG• Nominal send-out 10 Mm3/day

Energy Supply: Electricity generation• UTE: Natonal Utility Company• State owned• Monopoly of transmission and distribution• Generation:• 4 hydropower plants: 1538 MW• Thermal (Fuel oil and gas): 1173 MW• Renewable energy:
 Private generators
 532 MW wind
 410 MW biomass 240 solar (under construction)

Electricity matrix:
installed capacity (2013)

Hydro;
49%

Fossil41%

Biomass;8%
Wind; 2%

Source: National Directorate of Energy• International connexion: Argentina 2000 MW and Brazil 70 MW (underexpansion to 500 MW)

Energy Supply: Hydrocarbons• ANCAP: National Oil Company• Monopoly of oil imports and production of oil products• One refinery with capacity for 50.000 barrels per day Oil products for electricity generation: imported(large quantities required and technical characteristics)

 Oil products for other uses (transport, industry, residential): refined
domestically• Since 2010, biofuels are being produced, and mixed with gasoline andgas oil, for transport use

Energy Demand:
Energy demand evolution• Increasing trend
in line with GDP• Elasticity electricity to
GDP of 0.8

GDP index (1983=100) / Energy consumption index• Expected growth
rate: 2.5%600

10500840063004200

210000GDP (1983 prices)
final consumption
Ratio consumption/GDPSource: National Directorate of energy, Uruguay

Energy /GDP ratop• Last decade:average annual
growth: 5.9%12700

Energy Demand:
Energy Consumption bysector - 2013
PrimarysectorCommerc 6%e,services
9%

Main demand: Industry and transport

Industrial
35%

Residenti
al20%

Energy demand by sector
3%

11%
2%

17%

Transport
30%

43%

16%

78%97%

Source: National Directorate of Energy, Uruguay

71%

17%

51%

1%

36%

12%

16%

Industrial
Natural Gas

TransportWoodResidential

Biomass residues

7%

15%

Commerce /services

Primary sector

Oil Products

Biofuels

Source: National Directorate of Energy, Uruguay

Electricity

Demand and Supply Outlook• Supply• Measures taken:
 Diversification of powergeneration
 Currently over 90% ofpower generation fromrenewables

Renewables in power mix
1%
6%

6%

12%

11%
17%

76%
82%
68%

• Next steps: Optimization of all sources,including Natural Gas from storage
and regasification terminal

17%

2013

1%

3%

2014

2015

Source: National Directorate of Energy, Uruguay

Fossil thermal

Hydropower Scenario in case of confirming Hydrocarbons reserves?

BiomassWind

Demand and Supply Outlook• Demand:• Measures taken
 Funding for households and firms to incorporate energy
efficiency measures Light bulbs replacing campaign
 Labelling: water heaters, refrigerators• Next steps:• National Laboratories with capacity to verify and label home appliance andvehicles• Demand management price incentives
 smart grids?

The main challenges ahead• Transformation process aiming at diversification of energy supply: based onincorporating significant capacity of intermittent sources such as wind and solar• Need to be prepared: improving transmission and management• Uruguay engaged in hydrocarbon exploration activities. In case of confirminghydrocarbons reserves in the country, issues need to be addressed:• How exploitation is going to be carried out?
• How this new source of energy will be incorporated in the supply mix?
• What use should be given to potential economic profits?
• Measures for promoting energy efficiency have had low impact:• Need to foster cultural change
 Revising policy incentives
 Educational campaigns• Agricultural and Urban Solid Waste management: to produce biogas for heat andpower

Thank you!
paula.cobas@dne.miem.gub.uy

Uruguay - Energy Policy Course
Tokyo, 2015
Contact : report@tky.ieej.or.jp