Energy transition goals: Energy access and reliability. Renewable energy scale-up. Industrial competitiveness. Problem description: Uruguay’s heavy dependence on imported fossil fuels exposed the country to volatile global prices, supply disruptions and high carbon intensity. This over-reliance threatened energy security, affordability and economic competitiveness, while limiting resilience and slowing progress towards sustainable development goals. Solution description: Uruguay transformed its power system through a 2005 policy prioritizing diversification and resilience. By integrating wind, solar, biomass and hydropower with modernized grids, it shifted from fossil fuels to nearly 100% renewables. The state utility, UTE, anchored the transition via power purchase agreements (PPAs) that drew private capital while keeping public ownership, creating jobs, lowering costs and ensuring sustainable electricity. Enablers used: Regulation and political commitment: Long-term national energy policy (25-year vision); clear regulatory frameworks. Infrastructure: Large-scale renewables deployment and grid integration upgrades. Financial investment: Public-private partnerships (UTE-led PPAs mobilizing investment). Stakeholders involved: –National ministries of energy, economy and environment. –State utility (UTE). –Renewable energy developers. –Citizens and electricity consumers. Outcomes achieved: –Renewable energy scale-up through near-total decarbonization of electricity (98% renewables in under two decades). –Enhanced resilience and reduced dependence on fossil fuel imports. –Industrial competitiveness through reduced poverty and job creation (50,000 jobs). Exportable lessons: –Long-term policy certainty: A stable, forward-looking national framework can de-risk investments and anchor private-public collaboration. –Public-private partnerships can de-risk adoption: A strong state utility can balance public ownership with private capital to accelerate renewables deployment. –Integrated infrastructure planning: Coordinating generation with grid upgrades ensures reliability, scalability and resilience in rapid transitions.CASE STUDY 2 Renewable electricity generation in Uruguay (2005-2025)51 Energy Transition Readiness: Latin America and the Caribbean 23

Latin America&Caribbean Energy Transition 2025