On July 3, 2008, the price of oil hit $145 a barrel on world markets. Uruguay, sits between Brazil to the north and Argentina to the west. It’s eastern and southern border is the Atlantic Ocean. Uruguay has no domestic source of oil and so every drop of oil it needs has to be imported. In 2008, demand for electricity grew by 8.4 percent and homeowners were seeing their utility bills increasing by a similar amount.
Desperate for a solution, president Tabaré Vázquez turned to an unlikely source — Ramón Méndez Galain, a physicist with a background in nuclear power. “I had been working abroad for 14 years, and when I came back, there was this energy crisis, but the only solution people were giving was to install a nuclear power plant — that was it,” Galain tells The Guardian. “I was a nuclear physicist, so I thought I could understand a little about this problem.”
The more Galain researched the issue, the more he became convinced that nuclear power was not the answer for Uruguay. Instead, he argued, it was renewables. He published his findings in a paper that laid out his belief that the country should go all in on wind power. Soon after, he received a phone call inviting him to become Uruguay’s energy secretary and to implement his plan. “Imagine my surprise,” Galain says. “This was crazy. But I did something even more crazy — I accepted.”
Under Galain’s guidance, Uruguay now has one of the cleanest energy grids in the world. It has almost completely phased out fossil fuels in electricity production. Depending on the weather, anything between 90% and 95% of its power comes from renewables. In some years, that number has crept as high as 98%.
Over a decade, Uruguay installed 50 wind farms across the country, decarbonized its energy grid and bolstered its hydropower. The biggest challenge, Galain says, was changing the “narrative” about renewables. Back then, sustainable energies were still surrounded by many misconceptions — they were considered too expensive and too intermittent.They would create unemployment — a narrative being pushed this very week by a disgraced former US president. Changing these perceptions was critical to getting people at all levels of Uruguayan society to embrace renewables.
“No one believed we could do it. We needed new solutions. We needed to do things differently,” Galain says. “Today, even members of that cabinet say to me: ‘When you were saying those things on TV in 2008, we were thinking, how are we going to explain this when we fail?’” He says there needed to be a “strong national narrative” to make his plan work. “I told people this was the best option, even if they don’t believe climate change exists. It’s the cheapest and not dependent on crazy fluctuations [in oil prices].”
One big concern was that jobs would be lost in the energy sector. Instead, about 50,000 new jobs were created. That’s a significant increase in a country with a population of just 3.5 million. The idea of a “just transition”, in which nobody was left behind, became central. Some workers were offered job retraining to prepare them for jobs in the new renewable energy economy.
Today, Uruguay is an economic success story. Its per capita GDP in 2022 was £16,420 in 2022, according to the World Bank. That ranks first among all nations in South America. Only a tiny fraction of its population lives in extreme poverty. The country has a burgeoning middle class — about 60% of the population — and there are high expectations for a better life and more opportunities.
And yet, there are those who complain that their energy bills have not gone down. After all, wind, and sun, and water are free. Galain brushes off such concerns. “People are wondering what happened and why their bill isn’t lower. But in that same time period, we had 40% poverty Now it’s 10%, and extreme poverty has almost disappeared. People now have air conditioning that they didn’t have before, using more and more electricity.”
Xavier Costantini, a partner at the consultancy McKinsey, based in Montevideo, says that the idea that renewable energy is free is a misconception. There are maintenance costs, which are relatively modest, but the initial investment needs to be paid back. The wind may be free but turbines and grid infrastructure upgrades are not. One of the expectations that has to be managed is people’s belief that renewables come at no cost.
Bloomberg says the COP 28 climate conference in Dubai this year left fossil fuel producers grinning and climate campaigners fuming. Although the final statement indicated a desire to transition away from fossil fuels, it was mere precatory language, as the lawyers like to say. In other words, it expresses a wish, a desire, but provides no mechanism to make that wish come true. In the meantime, fossil fuel companies, banks, and governments are free to keep doing what they have always done — extract and burn fossil fuels.
“It’s too hard”, the detractors say. “It’s too expensive,” they moan. “It will cause mass unemployment,” one disgraced former president shrieks. But Uruguay shows it can be done. What is needed is a national commitment to the goal, similar to the way America supported the space program. “We chose to do these things not because they are easy but because they are hard,” JFK told the nation and the nation responded.
Getting off fossil fuels is hard. It is like asking a junkie to take the spike out of his arm. Addicts don’t want to hear such things. But hear them they must, as the people involved with Climate Defiance believe. America could follow the example set by Uruguay to transition to renewables. Where the US may not have the hydropower resources of Uruguay, but it has technology on its side. Form Energy and ESS are bringing affordable long term energy storage to market and other companies like Energy Dome are ready to pile into the BESS space as well.
The biggest hurdle is conquering people’s attitudes. NIMBY-ism is more of a challenge to renewable energy progress than any other factor. These people are like passengers on the Titanic complaining about other ships spoiling their view. We need people to get riled up. The issue is not immigrants or transgender people. The issue is a degraded planet that is struggling to provide a safe home for millions — or billions — of people whose lives are endangered by an overheated environment.
The key is to get back to first principles. What do we need the Earth to be in order to support human life for another ten thousand years? Once we pose that question, the pathway to a sustainable planet will become clear. When do we begin? “There’s no time like the present,” my old Irish grandmother would say.
