IEEE Power & Energy Magazine - September/October 2016 - 43

interconnections. if these obstacles are overcome, the prospects for renewable energy in Brazil are positive, with a
growing market and competitive costs.

Uruguay: Opportunities for Investment
in a Mature, Vertically Integrated Market
Features of the Uruguayan Electricity Market
the Uruguayan electricity market is vertically integrated
and controlled by the national administration of power
Generation and transmission (Ute), a state-owned company that regulates the liberalization of power generation,
involving private stakeholders, as well as free trade among
other regional countries. the Ute manages the participation
of independent generators through bids for each technology,
with purchase commitments usually lasting 20 years. moreover, the rules allow the Ute to associate with other private
companies. this Uruguayan model of public-private association has been very successful for investment promotion,
allowing for the autonomy of bordering countries.
the maximum demand load in Uruguay is about 1,900 mw,
and the installed power capacity is slightly over 4,000 mw,
of  which approximately 38% is from controllable hydropower (from dams), 30% is from conventional thermal, 21%
is from wind generation, 10% is from biomass, and 1% is from
solar photovoltaic.
By the end of 2015, Uruguay had 24 wind farms in operation, with an installed capacity of 856 mw, and ten projects then under construction will supply additional power of
657 mw in the short term. By the end of 2016, it is expected
that 25% of electricity demand will be met by wind resources.
concurrently, in terms of solar photovoltaic farms, as of
January 2016 three farms were in operation, with a power
capacity of 58 mw, and other 15 were under construction,
which will supply additional power of 170 mw. these were
all developed from bids through the Ute.
Uruguay constitutes an interconnected system, having
two international interconnections with Brazil and argentina (with montevideo serving as their load center). although
a power-generation market exists, the state is the main
buyer. the electricity spot price during 2015 was on average Us$60/mwh, with very low prices in several months
(close to zero). in turn, end users' electricity costs (including taxes) are around Us$210-Us$300/mwh for residential
users, Us$160-Us$250/mwh for commercial users, and
Us$130-Us$220/mwh for industrial users.

NCRES Incentives
the 2005-2030 state energy plan emphasizes the diversification of Uruguay's energy matrix, mainly by promoting the
use of conventional sources and ncres. the encouragement
and protection of investments made by both national and international investors, including the granting of important tax
exemptions, is in the public interest, according to the ncres
investment promotion policy. in this sense, for instance, an
september/october 2016

attractive policy grants to ncres investors exemptions from
taxation of income investment (from 20% to 100%, depending
on the type of project). in this context, the prospects for wind
power generation are outstanding, particularly taking into
account Uruguay's great natural wind resources, with capacity factors close to 40%. moreover, reduction in capital costs
of wind generators over the last several years has allowed
wind power to become a very economical option, with competitive electricity prices near Us$65/mwh (based on values
established during the most recent auctions).
another factor that encourages wind power is its complementarity with hydropower generation. hydrological phenomena occur less frequently than do wind phenomena (which
is why wind power is recommended). for instance, evaluating
hydroelectric power would take 30 years of measurement; by
contrast, evaluating wind power takes only one year. Likewise, hydroelectric plants are very reliable in the short term
thanks to dams, but they are not so predictive in the medium
and long term due to their hydrological randomness. on the
other hand, wind farms are very reliable in the medium and
long term, but not so predictive in the short term. these characteristics make wind and hydro intrinsically complementary.

Toward Smart Distribution Grids
at the distribution level, Uruguay is taking several steps toward
encouraging energy efficiency based on the new paradigm of
smart distribution grids. some regulations are being introduced to allow customers connected to a low-voltage network
to install their own generation based on renewable energy, with
the main requirement being that it not exceed 10 kw (16 a).
in this sense, the Ute is committed to buying all the energy a
prosumer injects into the network for a period of ten years, at
least under a typical tariff scheme for "net balance."
finally, it is worth mentioning that the Ute has recently
implemented a "smart plan" and mobile app services. the
former establishes a tariff scheme so that a day is divided
into two separate periods having different electricity prices;
during the peak load, the price is higher. Based on this plan,
between 2009 and 2014 more than 14 mw were shifted
from the peak load time. mobile apps now allow customers
to make several free arrangements, e.g., to make a claim for
loss of electric service or request a debt report or invoice.

Colombia: An Investment Opportunity
for Clean Energy Stakeholders
Electrical Industry Evolution and Current Issues
the evolution of the electrical industry in colombia since
the 1980s has been marked by the following milestones:
✔ transition from a generation matrix based on fossil
fuels (during the 1980s) to a current matrix based on
hydropower (68%) and thermal (28%)
✔ evolution of the electricity market from a vertically integrated model held by the state to a liberalized model
based on bids
ieee power & energy magazine

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Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - September/October 2016

IEEE Power & Energy Magazine - September/October 2016 - Cover1
IEEE Power & Energy Magazine - September/October 2016 - Cover2
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IEEE Power & Energy Magazine - September/October 2016 - Cover3
IEEE Power & Energy Magazine - September/October 2016 - Cover4
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