Uruguay is a global leader in the green transition, having decarbonized nearly its entire electricity grid in less than 20 years. As of 2025, the country generates between 98% and 99% of its electricity from renewable sources.
Key Statistics (2024–2025)
- Electricity Mix: Primarily composed of hydroelectric (42–46%), wind (28–38%), biomass (14–26%), and solar (3–4%).
- Total Energy Matrix: Roughly 55–64% of Uruguay’s total primary energy (including transport and industry) comes from renewables, with the remainder still relying on oil for transportation.
- Economic Impact: The transition attracted nearly $6 billion in investment, created roughly 50,000 jobs, and reduced electricity generation costs by approximately 50% compared to fossil-fuel-based systems.
Major Energy Sources
- Wind: Uruguay has over 1,500 MW of installed wind capacity, with more than 700 turbines nationwide. It is one of the world’s leaders in wind power production as a percentage of total power.
- Hydroelectric: Long the backbone of the grid, four major dams provide significant capacity, including the Salto Grande Binational Dam shared with Argentina.
- Biomass: Largely driven by the cellulose (pulp and paper) industry, which uses wood waste to generate power for its own plants and the national grid.
- Solar: While a smaller share (~4%), solar capacity is growing through state-owned UTE and private industrial self-generation.
Future Outlook: The “Second Transition”
Uruguay is now focused on its second energy transition, which aims to fully decarbonize the transportation and industrial sectors:
- Green Hydrogen: The government launched a National Green Hydrogen Strategy with the goal of becoming a major exporter, potentially generating $2.1 billion annually by 2040.
- E-Fuels: Projects like HIF Global (a $6 billion investment) and NovaSAF 1 (sustainable aviation fuel) are in development to produce synthetic fuels using renewable energy.
- Offshore Wind: The state company ANCAP has launched projects to facilitate offshore wind farms specifically for green hydrogen production.
Despite its clean energy success, Uruguay pursues offshore oil and gas exploration to capitalize on geological similarities with recent discoveries in Namibia, a move that has drawn criticism from environmental groups.
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