Risks of Investing in Alternative Energy

In the last two years the country which is the Latin American champion in wind energy lost $63 million a year from purchasing wind MWh at $70 and having to resell it at $7.

Thursday, April 7, 2016


We are in agreement with the need to contribute to the sustainability of human development on this planet, and the need to transform the energy matrix of countries in order to become less dependent on oil, but the balance of the cost of this transformation needs to be adequate, in order to avoid making the kind of mistakes committed by the government of Uruguay.

In 2010 Uruguay drew up an energy policy for the next 20 years, which included setting a goal of adding 300 MW of wind power. With oil prices skyrocketing, the state and monopolistic power distributor UTE, proceeded to sign 20 year contracts with suppliers of electricity generated from wind, with such success that in 2015 the wind farms in operation already provided 844 MW and, counting what will be provided by those under construction at the end of 2016 the installed wind power capacity will reach 1,500 MW. The success of the Uruguayan wind program was broadcast urbi et orbi, as an inspiring example of an energy policy with an environmental vocation.

However, the fall in oil prices ruined the party, and Uruguay today has a surplus of 10% in generation capacity. The hydroelectric reservoirs are full, despite the drought of 2015, and surplus electricity must be sold at a loss, when possible, to neighboring Argentina and Brazil, at ruinous prices, while contracts with wind generators must be honored at $70 per MWh. For 20 more years ...

See article: "Energy Disorder" (In Spanish)

More on this topic

Panama: Wind Power Blows Strong

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On January 1st, the Penonomé wind farm produced a fifth of all domestic electricity generation, or 5.1 GW/h.

According to the Electric Transmission Company, SA (Etesa), the Penonomé wind farm in the province of Cocle, broke the record for energy production on the first day of the year, after reaching an operating capacity of 197.5 megawatts (MW), 21.7% of the national requirement .

Costa Rica: State Wind Farm Suffers Losses

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The high cost of production exceeds the average sales price for energy, and almost doubles the average purchase price from its main supplier, the Instituto Costarricense de Electricidad.

An audit report by the Comptroller General of the Republic of Costa Rica said that the state wind power project run by the Compañía Nacional de Fuerza y Luz generated losses of just over $1 million, and that "inconsistencies were determined in revenues, costs and results of the indicators of financial viability of the project; specifically the quantity and value of the expected annual energy was overestimated; and investment costs, operation and maintenance were underestimated. Also, there was no evaluation of possible sources of finance for the investment, the financial effect on the CNFL SA of the established financing scheme, implementation, operation and acquisition of Parque Eólico Valle Central. "

Wind Projects in Guatemala

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Of a potential of 1,000 MW of power generated through wind in the country, 101 MW will start to be generated from three wind projects which will start operations in May 2015.

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Costa Rica: 49 MW Wind Farm Starts Operation

July 2014

The "Chiripa" park in Guanacaste consists of 33 1.5 MW wind turbines and is operated by the consortium made up of the Spanish firm ACCIONA and Grupo Ecoenergía from Costa Rica.

From a statement issued by ACCIONA Energy:

ACCIONA Energía has put the 49.5 MW Chiripa wind farm into commercial service, the company's first in Costa Rica.pa

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