1. ENERGY STORAGE IN ENERGY POLICY URUGUAY 2030
Ramón Méndez
Former Secretary of Energy
of Uruguay ( )
Chair IRENA´s Council (since 2013)
Rio de Janeiro, April 2015

2. FRAMEWORK AND HISTORICAL BACKGROUND
(before 2005)
Uruguay has no proven reserves of oil, natural gas or coal
No access to natural gas in the region
No space for new large hydropower plants
Hydro: varies from 45% to 85% of electric mix (“El Niño”) 2 2 2

3. FRAMEWORK AND HISTORICAL BACKGROUND
(before 2005)
Uruguay has no proven reserves of oil, natural gas or coal
No access to natural gas in the region
No space for new large hydropower plants
Hydro: varies from 45% to 85% of electric mix (“El Niño”):
- Huge potential over costs 3 3 3

4. FRAMEWORK AND HISTORICAL BACKGROUND
(before 2005)
Uruguay has no proven reserves of oil, natural gas or coal
No access to natural gas in the region
No space for new large hydropower plants
Hydro: varies from 45% to 85% of electric mix (“El Niño”):
- Huge potential over costs
- Increasing share of imported oil in the primary energy mix 4 4 4

5. FRAMEWORK AND HISTORICAL BACKGROUND
(before 2005)
Uruguay has no proven reserves of oil, natural gas or coal
No access to natural gas in the region
No space for new large hydropower plants
Hydro: varies from 45% to 85% of electric mix (“El Niño”):
- Huge potential over costs
- Increasing share of imported oil in the primary energy mix
An economy growing at 6%/yr (average) during 10 years 5 5 5

6. DRAMATIC CHANGES IN RECENT YEARS6

7. GLOBAL PRIMARY MIX 2016 OIL 39% LNG 6% HIDROELECTRICITY 14%
BIOELECTRICITY 5%
BIOHEAT
15%
OTHER BIOMASS
10%
WIND
BIOFUELS 3%
SOLAR 1%

8. GLOBAL PRIMARY MIX 2016 55% RENEWABLE OIL 39% LNG 6% HYDROELECTRICITY
14%
BIOELECTRICITY 5%
BIOHEAT
15%
OTHER BIOMASS
10%
WIND
BIOFUELS 3%
SOLAR 1%
55% RENEWABLE

9. ELECTRIC MIX 2016
94% RENEWABLE

10. DECREASING ENERGY COST
73 US$/MWh
46 US$/MWh
DECREASING ENERGY COST
Electricity cost according to rain probabilities
AVERAGE YEAR
DRY YEAR
RAINY YEAR

11. STRONGLY DECREASING CLIMATE VULNERABILITY
75 US$/MWh
25 US$/MWh
STRONGLY DECREASING CLIMATE VULNERABILITY
Electricity cost according to rain probabilities
AVERAGE YEAR
DRY YEAR
RAINY YEAR

12. VERY LOW GHG EMISSION INTENSITY
Source: IEA 12 12

13. WHAT HAPPENED? 13

14. THE MAIN INGREDIENTS
A long term (2030) global energy policy, including economic, environment, cultural and social issues was defined in 2008
The policy was backed in 2010 by all political parties and it has a strong social support
The adequate framework (legal, institutional, regulatory, capacity building) was build
Public-Private Parternships (with the Public Utility and the National Oil Company): looking for win-win oportunities 14 14

15. ENERGY POLICY URUGUAY 2030 Four “Strategic Guidelines”
Multidimensional and integrated vision, including technological, economic, geopolitical, environmental, ethical, cultural and social issues
Four “Strategic Guidelines”
Short, medium and long term goals
An evolving set of tools 15 15 15

16. VERY STRONG STATE LEADERSHIP
INVESTMENTS ( )
7.1 billion dollars
2.4 billion public sector
(Public Utility and National Oil Company)
4.7 billion public-private parternship
3% of GDP per year (5 times Latin American average)
VERY STRONG STATE LEADERSHIP
HAS ALIGNED PRIVATE INTERESTS TO PRODUCE A NATIONAL STRATEGIC TRANSFORMATION 16 16

17. THE MAIN ACTIONS
1) Fast introduction of non-traditional renewable sources
2) LNG regasification terminal
3) Structural transformation of the electric sector
4) Domestic oil and gas exploration
5) Strong enhancement of energy efficiency
6) Energy access (defined as a “human right” in Uruguay) 17 17

18. RENEWABLE COSTS Wind energy: 62 US$/MWh (2011) PV: 92 US$/MWh (2014)
Biomass: 92 to 128 US$/MWh (it includes up to
33 US$/MWh of externalities) 18

19. ONLY THE APPROPRIATE FRAMEWORK TO COMPETE
RENEWABLE COSTS
Wind energy: 62 US$/MWh (2011)
PV: 92 US$/MWh (2014)
Biomass: 92 to 128 US$/MWh (it includes up to
33 US$/MWh of externalities)
NO SUBSIDIES
ONLY THE APPROPRIATE FRAMEWORK TO COMPETE 19

20. RENEWABLE COSTS Wind energy: 62 US$/MWh (2011) PV: 92 US$/MWh (2014)
Biomass: 92 to 128 US$/MWh (it includes up to
33 US$/MWh of externalities)
Renewable energies reduce and stabilize electricity costs:
- average generation cost: 45 US$/MWh
- long term PPA 20

21. Structural transformation of the electric sector to make this possible
Base: wind, hourly followed by hydro 21

22. Structural transformation of the electric sector to make this possible
Base: wind, hourly followed by hydro (stability!) 22

23. Structural transformation of the electric sector to make this possible
Base: wind, hourly followed by hydro (stability!)
Biomass and natural gas combined cycle complementing 23

24. Structural transformation of the electric sector to make this possible
Base: wind, hourly followed by hydro (stability!)
Biomass and natural gas combined cycle complementing
Dramatic redefinition of dispatch rules and grid expansion criteria, including smart grids to manage demand 24

25. Structural transformation of the electric sector to make this possible
Base: wind, hourly followed by hydro (stability!)
Biomass and natural gas combined cycle complementing
Dramatic redefinition of dispatch rules and grid expansion criteria, including smart grids to manage demand
Increase of regional interconnection (2000 MW with Argentina; 570 MW with Brazil) 25

26. WIND ENERGY 0 MW in 2007 594 MW today 1200 MW by mid 2016
(45% of average power demand)
1200 MW by mid 2016
(95% average power demand) 26

27. WIND ENERGY 0 MW in 2007 594 MW today 1200 MW by mid 2016
(45% of average power demand)
1200 MW by mid 2016
(95% average power demand)
Total hydro installed capacity: 1550 MW 27

28. ENERGY STORAGE
To continue the introduction of wind energy, extra strategies are needed after 28

29. ENERGY STORAGE
To continue the introduction of wind energy, extra strategies are needed after :
Demand management (real time electric rate: irrigation, household electric appliances, smart grids) 29

30. ENERGY STORAGE
To continue the introduction of wind energy, extra strategies are needed after :
Demand management (real time electric rate: irrigation, household electric appliances, smart grids)
Storage in electric vehicles
Storage in reversible hydropower plants 30

31. REVERSIBLE HYDROPOWER PLANTS
The performance of a reversible hydropower plant in the national electric system was assessed (
Power: 600 MW
Energy stored: 5.84 GWh
Height difference: 125 m
Upper stored water volume: 17 hm3
A simulation (short, medium and long term scales) of the system dispatch and energy cost was assessed 31

32. REVERSIBLE HYDROPOWER PLANTS
Feasibility study of a specific location based on geological, geotechnical, hydraulic, electromechanical and environmental studies
REVERSIBLE HYDROPOWER PLANTS 32

33. Thank you! ENERGY STORAGE TO CONTINUE RENEWABLE ENERGY INTRODUCTION
94% renewable electricity
ENERGY STORAGE TO CONTINUE
RENEWABLE ENERGY INTRODUCTION 33 33

34. STRATEGIC GUIDELINES Institutional
Government defines and coordinates energy policy
Public utility (UTE) and NOC (ANCAP) as the main tools
Enhanced participation of private companies
Transparent and stable regulatory framework
Supply
Energy mix diversification (sources and suppliers)
Reduce share of imported oil
Increase share of domestic sources
Strong support to renewables, with no subsidies
Building local capacities (technology transfer)
Keeping low carbon footprint 34

35. STRATEGIC GUIDELINES (continue)
Demand
Strong support to energy efficiency in all energy sectors and all activities (transport, building, industry)
The State as a paradigmatic example
Promoting a cultural change
Social
Adequate energy access to all citizens as a human right
Energy policy embedded in national social policies to face vulnerability 35