Feature: Uruguay seeks energy independence

By the Potencia correspondent

In recent years, Uruguay has been importing significant quantities of electricity from its neighboring countries, in particular Argentina. However, the Uruguayan president Jose Mujica is increasingly concerned about this energy dependence and the high costs it incurs.

State-owned power company Usinas y Trasmisiones Electricas (UTE), together with the Ministry of Industry, has formulated a plan that aims to achieve energy independence for this small South American nation.

In November, UTE approved a competitive process for the rental of more temporary power generator packages. Such systems were used during the country’s last winter period. UTE manager Carlos Pombo justified the decision by saying that the costs associated with installing temporary power were minor when compared to purchasing electricity from Argentina.

Tensions have grown between the Uruguayan government and the Argentinean president Cristina Fernnndez de Kirchner, and are said to originate from the disqualification of Argentine’s Electroingenieria in a tender for the construction of a combined-cycle power plant in Punta del Tigre, in the South of Uruguay.

UTE eventually awarded the works to South Korean Hyundai, which offered a price of $529 million. According to El Diario, the power plant is expected to reach an installed capacity from between 480 MW to 590 MW.

UTE says that the rent of generators will reduce problems and guarantee a correct electric supply to the country.

Speaking to El Observador an UTE executive said “the [temporary power solution] makes sure that the country will be safe against all eventualities, including Argentinean politic decisions and a dry winter, which affects the dams”. Last winter saw its hydropower stations unable to produce enough electricity because of a low water levels in the reservoirs.

The rental of generators during last winter helped to make up for this hydropower shortage, producing 200 MW of power. Additional temporary power capacity is expected to reach 200 MW, meaning that there will little requirement for Uruguay to import from Argentina.

APR Energy, a specialist in temporary power solutions, recently signed a second contract with UTE, to provide temporary power packages based on diesel-fired turbine generators, totaling 200 MW. The term of the agreement is to mid-2014.

Earlier this year the US-based company installed 100 MW of temporary power, based on the FT8 MobilePac duel-fuel turbine generators, within an impressive 45 days to help Uruguay meet domestic demand and avoid having to import electricity.

UTE has also increased investments in other areas of the electricity sector in recent years.

Gonzalo Casaravilla, UTE president, told La Republica that between 2000 and 2004 investments only reached $300 million, but in the following period (2005-2009) more than doubled to $750 million. Between 2010 and 2015, close to $1.5 billion is expected to be invested, with that increasing to $2.15 billion up to 2017.

Investments planned until 2017 include an interconnection between Uruguay and Brazil, and the construction of distribution lines between the cities of Rivera and Tacuarembo.

Other planned projects include the installation of 1000 km of power lines in rural areas on an annual basis.

The government is also keen to invest in wind power. UTE has planned 20 new wind farms to be built right across the country. Some wind farms will be constructed in partnership with Brazil’s Electrobras.

National Director of Energy, Ramon Mendez, told La Republica that the first wind farms included in the government plans will be operational by early 2014, and by 2015 the country’s installed wind capacity is expected to be around 1000 MW.

Mendez said that the government wants to increase renewable energy use in the country to 50 per cent of total production by 2015, which will be seen as a “record” achievement.

UTE expects that by 2020, Uruguay’s electricity generation mix will comprise not only wind power but also biomass plants and supported by gas-fired combined cycle power stations.

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