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Uruguay diversifies energy mix with 530 MW combined-cycle-gas-power plant

Thursday, December 20th 2012 - 20:38 UTC
Full article 32 comments
Hydro is the main source of power in Uruguay Hydro is the main source of power in Uruguay

The Inter-American Development Bank (IDB) has approved a loan for 200 million dollars to Uruguay to help finance the construction of a 530 MW combined-cycle gas power plant to help diversify the country's energy mix in an environmentally sustainable manner.

The new plant with a total cost of 740 million dollars will reduce the vulnerability of the country’s energy system in years when low rainfall affects hydroelectric generation.

The loan will finance construction of the combined-cycle Punta del Tigre “B” power plant, complementary works, and support for an environmental management program for the National Electricity Generation and Transmission Authority (UTE), a decentralized state agency charged with ensuring sustainable electrical service in Uruguay.

The Punta del Tigre “B” plant, which will be the country’s first combined-cycle facility, will be built on the same site as Punta del Tigre “A” plant. The site is served by a gas pipeline from the Cruz del Sur pipeline, which will be connected to a future re-gasification plant that will supply natural gas to the new plant. The plant is located in Colonia Wilson, Department of San Jose, 40 km. west of Montevideo.

The total investment in the construction of the Punta del Tigre “B” plant is 741.2 million. Also participating in the project are the Andean Development Corporation, with 180 million; Germany’s KfW, with 70 million; and UTE, with 291.2 million. The winner of the bidding process was Korea’s Hyundai.

The IDB loan for 200 million has a term of 25 years, a grace period of five years, and an interest rate based on LIBOR.

Uruguay’s power production has not kept pace with the strong growth of its economy in recent years besides the fact that most of its energy is hydroelectric (80%) and erratic rainfall, probably because of climate change, has made the whole system more vulnerable to peaks and troughs.

An Argentine company Electroingenieria has appealed the bidding process, since it was the first choice. However on a thorough review of conditions, the Argentine group did not comply with the condition of having built three similar gas power plants in the last fifteen years.

A second IDB loan of 70 million dollars was awarded to Uruguay to finance the Urban Mobility Plan for Montevideo. The funds should help finance a fast 25 kilometres corridor, and its surrounding infrastructure from the Carrasco airport to downtown Montevideo.

In 2012 the IDB has awarded ten loans to Uruguay totalling 440 million dollars.

Categories: Energy & Oil, Uruguay.

Top Comments

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  • redpoll

    Yes its a problem as Uruguay has no oil of its own as yet but we are still hoping for results from offshore and possible on shore at Pepe Nunez in Salto
    All our needs could be supplied from Paraguay which exports 90% of the hydro power it produces, mainly to Brazil at knock down prices. Some of this electricity is then reexported to Uruguay at international market prices or more. The other alternative is to use the Argentine transmission lines but the astronomical charges they ask for doing this makes that more expensive than an oil or gas powered generating station
    The truism often qoted by UTE, the state electicity monopoly, is that the hydro power in Uruguay is fully used. Nonsense! There is another site on the Rio Negro which could be developed. Added to which many more mini hydros could be used such as the Cunapiru dam , constructed in 1880 as the first hydro dam in SA and breached in the big flood of 1959. I think over 90% of the water in our rivers flows into the sea as against less than 20% in Spain. Ok the main base load will continue to be provided by our big hydro dams, suplemented by oil fired power stations. But off peak generation can be used by base load stations for what is known as pumped storage. This technology is not new. You use excess electicity at night to pump water into a storage dam by a reversible pump/turbine. When peak load between 5pm and 11pm comes on you you release the storage to generate electricity and then reuse the water by pumping it back in the slack periods
    What is needed here is a macro policy on water resources which takes into account the cost benefits not only of power generation but also agricultural irrigation, particularly for rice , a major export but also heavily dependant on high water usage
    We have a major subterainian water resource in the Guarani acquifer which our nieghbouring countries are happily using We are not.
    Lets wise up Uruguay!

    Dec 21st, 2012 - 03:43 pm 0
  • ChrisR

    @1 redpoll

    Excellent précis of the present situation, highlighting as it does the gargantuan monopoly that is UTE.

    This announcement comes at the 99th hour before the IDB loan expired. The reason it almost expired is that UTE accused the preferred bidder of false references. I checked this out myself and realised what they said was the truth BUT the Hyundai they railed against was NOT the Hyundai who is STILL the preferred bidder and WINNER of the contract.

    Talk about the right hand not knowing what the left hand was doing! Pitiful.

    Dec 21st, 2012 - 09:14 pm 0
  • Stevie

    I think that two expats presenting their views on how the country they chose as destiny should run their business in the energy sector is fair enough, but kind of a waste of time.
    Especially regarding the fact that according to themselves, they seem to be on top of things.

    If you like me have difficulties with the Spanish language, try inserting the link in google translate.

    Dec 21st, 2012 - 10:31 pm 0
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