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Uruguay’s power grid runs on 98% green energy. Here’s how it’s done: Planet Money: NPR

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Uruguay’s power grid runs on 98% green energy. Here’s how it’s done: Planet Money: NPR

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Ramón Méndez Galain was Uruguay’s national energy director from 2008 to 2015. His energy sector plan resulted in 98% of Uruguay’s grid being powered by green energy. Much of that came from wind power – from the turbine behind him.

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Ramón Méndez Galain was Uruguay’s national energy director from 2008 to 2015. His energy sector plan resulted in 98% of Uruguay’s grid being powered by green energy. Much of that came from wind power – from the turbine behind him.

AMANDA ALONZIK/NPR

In 2007, Uruguay faced a huge problem, but there seemed to be no solution. The country of 3.5 million people was growing economically, but there wasn’t enough energy to support that growth. Energy was being rationed, and people were paying higher and higher electricity bills.

“We had a hard time coping,” Ramon Mendez Galan recalled. “It was hard to get electricity. At one point, we started having blackouts.”

Mendes Galan was trained as a particle physicist. “When you’re trained as a scientist,” he said, “you’re trained to find an unsolved problem and[try to]find explanations and solutions. So I used the same strategy, if you will, to approach this difficulty, using the scientific skills that I had developed.”

He began researching the various possible pathways for Uruguay’s energy future, contacting experts he knew around the world. Eventually, he developed a complete plan for how Uruguay could change its energy mix to rely almost entirely on renewable energy. That would pollute less, be better for the climate, and, he argued, would be the most economical choice Uruguay could make in the long run.

Then one day, Mendes Galan received a call in his office.

Ramón Méndez Galain in his living room in Montevideo.

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Ramón Méndez Galain in his living room in Montevideo.

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“He said, ‘Oh, hello, Ramon,'” Mendez-Gallan recalled. “I’ve been reading what you said. I’m talking to the president, and we want you to implement this strategy.'”

The president of Uruguay saw what Mendez Galan was planning and now invited him to be the new national energy director of Uruguay. Mendez Galan accepted the invitation.

Over the past decade, countries around the world have announced ambitious goals to reduce emissions that cause climate change. In the United States, President Biden has set a goal of Achieve 100% carbon-free electricity by 2035But Uruguay has almost achieved that goal. In a typical year, 98% of Uruguay’s electricity grid is powered by green energy.

Mendez Galan’s plan is based on two simple facts about Uruguay. First, Uruguay has no domestic supply of fossil fuels like coal or oil, but it has abundant wind resources. Second, the areas where wind power can be generated are mostly uninhabited agricultural land. His vision for Uruguay’s energy future is to install hundreds of wind turbines on this barren land.

Today, wind power accounts for about 40 percent of Uruguay’s energy production, and under a 2008 law, all of the country’s wind energy officially belongs to the Uruguayan people.

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Today, wind power accounts for about 40 percent of Uruguay’s energy production, and under a 2008 law, all of the country’s wind energy officially belongs to the Uruguayan people.

AMANDA ALONZIK/NPR

To solve the problem of how to pay for all those turbines, Mendes Galan has come up with a different approach than the one taken by some power companies in neighboring Brazil. Those utilities operate through public-private partnerships, in which the utility is responsible for generating electricity while the private company handles distribution and customer service. Mendes Galan’s plan involves reversing that relationship so that private companies would be responsible for installing and maintaining the wind turbines that power Uruguay’s grid, while the utility would continue to distribute that energy to its customers.

His plan had a built-in advantage: it would shift the billions of dollars in upfront costs of building all those wind turbines onto private companies. In exchange, the utilities would agree to buy all the energy those turbines produced at a fixed price for 20 years.

“Investors need to be sure that they will get a return on their investment,” Mendes Galan explained, “and they need time to do that.”

In 2009, Uruguay began holding auctions in which wind companies from around the world bid on how cheap they could sell renewable energy to the country.

In 2011, Uruguay held an auction to acquire 150 megawatts of new wind power, equivalent to about 5% of the country’s energy generation. After more than 20 companies submitted bids, Mendes Galan and his team decided to significantly accelerate the timeline for the country’s energy transition.

They accepted far more bids than originally planned, and awarded contracts that increased Uruguay’s generating capacity not just by 5% but by more than 40%.

Within a few years of getting the call inviting him to become the country’s energy director, Mendez Galan had achieved his goal. Uruguay’s grid is powered almost entirely by domestically produced renewable energy, and consumer prices have fallen when adjusted for inflation. Today, more than 700 wind turbines are installed in rural Uruguay.

“This is absolutely a complete transformation,” Mendez Galan said. “A lot of people are calling this the Uruguayan energy revolution. Because it is a revolution.”

Today’s show is hosted by Erika Beras and Amanda Aroncyzk. The show is produced by Willa Rubin, with assistance from Emma Peaslee. The show is designed by Maggie Luthar, fact-checked by Sierra Juarez, and edited by Keith Romer. Alex Goldmark is our executive producer.

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Music: Audio Network – “Fruit Salad,” “Caviar,” and “Stars Align”

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