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“Uruguay Will Not Renounce Solar Energy”

April 12, 2019


In an exclusive interview held during the meeting “Experience of Uruguay: Business Hub of Latin America”, organized by the Uruguayan Embassy in Berlin, the country’s Minister of Energy, Guillermo Moncecchi, spoke about the future of solar in the country’s energy mix, while also recognizing its great potential by virtue of the fall in panel prices. Although its share is currently very limited and there are no prospects for large growth in the short term, solar power currently has good opportunities for development in distributed generation, as electricity prices are constantly rising. As for large-scale projects, new auctions could be held again in the coming years, but not immediately. The country, however, is still listed among the countries with the highest share of renewables in the world, with a precentage close to 98%.

pv magazine: Minister Moncecchi, Uruguay was a pioneer in Latin America in the development of solar energy at the beginning of this decade. It was one of the first countries to hold a specific auction for large solar projects, one of the first to build them, and I believe that for some time it was also among the first photovoltaic markets in Latin America. Now, however, it has seen very low levels of solar growth for the last few years. What is your opinion on this?

Guillermo Moncecchi: The history of solar energy in Uruguay is part of the history of its energy change. That is to say, the strategy of the country has been to diversify the matrix, to bet on different sources, initiating different ways and to advance accordingly to what would be more convenient from an economic point of view. Solar was one of the paths, and it is not a way that we have discarded. Currently, it represents 2% of the generation, but undoubtedly, wind energy and hydropower have had more importance. Hydro because it was a traditional source, and wind because it has turned out that Uruguay is a windier country than we thought.

Uruguay has a lot of sun too.

It is true that it has it, and although the road to wind has been the one that has taken the largest share, solar is also participating with more than 200 MW.

The Uruguayan solar sector speaks of stagnation and blames the over-dimensioning of wind energy. Can Uruguay renounce a technology such as PV?

Of course not. The Uruguayan energy strategy is to plan the paths and then keep monitoring them all the time. For example, it is likely that, with the fall in costs it is showing, solar will become increasingly convenient and we will certainly incorporate what is most convenient. And with this, it is likely solar will find its way in Uruguay.

Only in 2018 panel prices fell by more than 20%.

It’s amazing, no doubt.

Does the government now plan to hold new auctions for solar energy?

Not immediately, because there is already a considerable surplus of energy and it would not make sense to incorporate more. But if we manage to advance in certain strategies, possibilities could be opened up. These strategies involve the use of electric vehicles or the export of energy, which is effectively advancing, or a growth in demand, for example, in industrial consumption, which today does not seem very simple given the context, but could be.

Then we talk about a few years. Could it be a time frame of, let’s say, five years?

I think so, we are talking about some years.

Does that mean that in the short term we will no longer see the construction of new solar parks?

In the short term, there is a development plan for a 10 MW solar park by a public company. If there will be projects that could be considered useful for the development of the country, or that imply job creation, these could be taken into consideration. But in this sense, immediately there will be no calls from the government.

Do you think that in Uruguay there is potential for large-scale solar projects that sell energy through private PPAs?

Directly, yes. In fact, they already exist but for wind and other renewable energy. I also see a lot of potential for companies that want to install panels to generate their own energy.

Distributed generation is being promoted through the Investment Law which grants tax benefits. However, the solar sector believes that the government is not giving enough diffusion and dissemination to the advantages of solar technology.

Well, I would ask the sector to help us spread this information. We have made a great effort to modify the Investment Law, and to make it more attractive. In general, ideas for spreading more information are very welcome.

Electricity prices are rising in Uruguay. Could this help distributed generation?

Absolutely. Investment promotion through the Investment Law goes in this direction. It aims at the development of economic sectors through investments. It makes it easier and cheaper to invest, always with the condition of generating externalities for the country.

In Uruguay there is now an excess of power generation. What is the potential of storage technologies in this regard?

It is one of the lines of research, but our main line is at this time for the issue of transport. I mean electric vehicles. We are generating infrastructure and we have a lot of expectation with that. The storage is a line that we do not rule out, but the complementarity between wind energy and the load of vehicles at night seems to be a good opportunity.

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