Snapshot: Uruguay’s distributed generation segment

Uruguay’s installed capacity eked out growth in 2020 – driven by the distributed generation segment.

Over the year, total installed capacity rose 0.1%, propelled by an increase in capacity corresponding to solar units installed by user-generators.

Installed solar distributed generation capacity stood at 25.0MW in 2020, up from 21.3MW a year earlier and 2.69MW in 2014, according to data in the industry, energy and mining ministry’s 2020 national energy report, known as BEN.

The commercial segment accounted for just under 15MW of installed solar distributed generation capacity, with industrial accounting for around 5MW and the balance corresponding to farming and residential.

Last year, user-generators pumped out 32.0GWh, up from 29.9GWh in 2019 and 2.11GWh in 2014.

A corporate tax relief scheme geared to spurring investment in productive assets was the central driver behind solar distributed generation growth, Fernando Schaich, founder of Uruguayan energy consulting firm SEG Ingeniería, told BNamericas. 

If a project, such as a warehouse, had an incorporated renewable energy element – a rooftop solar installation, for example – the entire investment attracted an even higher level of tax relief. 

This year the government tightened the regulations, making the corporate tax relief framework less attractive for solar projects.

“Everything indicates that this boom in solar PV installations will decelerate a little,” said Schaich, who leads the renewable energy division of the company, which has operations (renewable energy developments) in Mexico, Colombia, Chile, Argentina, Brazil and Uruguay.

Uruguay’s renewable energy industry is lobbying for incentives to be boosted again.    

USER-GENERATORS IN 2020 BY SEGMENT

Farming 

Injected into grid: 3.65GWh
Consumption: 1.09GWh

Industrial

Injected into grid: 2.84GWh
Consumption: 3.62GWh

Commercial

Injected into grid: 10.0GWh
Consumption: 8.68GWh

Residential 

Injected into grid: 1.54GWh
Consumption: 590MWh

 CREDIT: Uruguay's industry, energy and mining ministry

WIDER ENERGY SECTOR

Solar power capacity stood at 258MW, or 5% of the country’s installed capacity of 4.93GW.

Hydroelectric plants accounted for 31% of the 4.93GW, wind 31%, fossil fuels 24% and biomass 9%.

On the utility-scale generation front, Uruguay plans to add solar PV parks from 2028, state utility UTE has said previously, citing favorable costs as a key attraction. 

Amid a drop of hydropower plant water levels, output from these power stations fell 50% last year. Against this backdrop, the country imported 514GWh, the first time it had to buy power in eight years, and increased generation from non-renewable sources. 

Overall generation in 2020 was down 16% to 13.6TWh, with wind accounting for 40%, hydropower 30%, biomass 20%, fossil fuel-fired 6% and solar 4%.

On the global stage, Uruguay was second only to Denmark last year in terms of the proportion of power generated from wind and solar sources, according to data from independent climate and energy think-tank Ember.