The Uruguayan government has set its sights on becoming one of the world's leading wind power producers as part of plans to produce 90% of its electricity from renewable sources by 2015, although much of the plan is still on the drawing board.
Electricity generated from wind is expected to make up 30% of Uruguay’s total mix, with hydropower contributing 45%, and biomass 15%, according to reports from Smart Planet.
This would put Uruguay ahead of current renewable energy leader Denmark, which gets 26% of its electrical generation from wind.
While Uruguay has a number of hydro power plants, these tend to shut down in dry periods, forcing the country to purchase electricity from Argentina and Brazil at up to 400 dollars per megawatt hour (MWh). The government hopes installing wind farms could provide a more secure source of energy and drop electricity prices to around 64dollars/MWh, well under the current price of 90/dollarsMWh.
However, to achieve its goal the country would need to raise its current 50MW wind capacity to over 1GW by 2015 and spend an estimated 7bn in upgrading its energy infrastructure.
However although the target seems distant, investment has already started to flow and the UTE state electric company has signed contracts to buy electricity from 20 private wind farms that are still to be constructed.
South America has seen rapidly increasing levels of investment in renewable energy over the past year and many analysts expect the region to lead a charge from emerging markets, which are increasingly proving fruitful for investors.
Wind industry giant Vestas last week signed a deal to supply a new 90MW wind farm in Chile, while Ecuador completed its first wind farm, a 16.5MW development in the southern province of Loja, at the start of this year.