Edificio Celebra, a seven-story office tower found in Zonamérica Park, is a glowing example of environmentally friendly architecture designs in Uruguay. With a capacity for up to 1,200 employees, the design includes a vertical garden for which Spanish biologist Ignacio Solano combined more than 6,000 plants. The building has achieved the highest certification by the U.S. Green Building Council, LEED Gold.
Construction projects outside of the continental United States can come with some interesting challenges. While cultural and political differences can present barriers to overcome, there is a lot to be learned, as well. For example, one of our notably smaller South American neighbors, Uruguay, has successfully found ways to shift the country’s power consumption to mostly renewable energy sources and provide incentives to make it happen. Those looking to build there are offered a fresh view on how responsible renewable energy initiatives can change not only local construction practices, but a country’s future.
Throughout Uruguay, there is a strong emphasis on local energy production with natural priorities for solar energy including rural areas—particularly rural schools and churches far from the grid, as well as hospitals, hotels, sports clubs, and new public buildings.
A promise for renewable energy
Uruguay, geographically the second-smallest nation in South America, is home to an estimated 3.45 million people, of whom roughly 1.8 million live in the metropolitan area of its capital, Montevideo. But don’t let its relative size or location fool you. This small country might just have a blueprint for renewable energy that others could follow.
Since international agreements to the Kyoto Protocol in 1997, hailed as the first major international treaty on climate change, Uruguay has surprised its South American neighbors and the world with a growing list of environmental successes, including conserving native forests, and protecting biodiverse areas. Leaders of the country have shown remarkable progress on their promises for the country to be carbon neutral by 2030. In fact, according to the International Energy Agency, only a handful of nations are more reliant on wind and solar power. In the decade leading up to 2017, Uruguay went from having virtually no wind power to nearly 4,000 megawatts of installed capacity with emissions falling roughly 20% from their peak in 2012.
Data from export.gov: 98%-100% of the country’s electricity comes from renewable sources compared to just 40% as recently as 2012.
Much of the heavy lifting to transform Uruguay’s energy landscape was done by Frente Amplio, or FA, the country’s governing party from 2005 to 2020. One of the keys to the success of FA projects was that they were built on a broad consensus among a wide range of national and international stakeholders. Another important aspect of the agreements was that they not only included outside investors, as is so often seen, but important in-country stakeholders, as well. Those who have analyzed the renewable energy movement in Uruguay refer to it as a vision for an inclusive, people-oriented strategy for energy transformation. It has shown not only remarkable promise, but results.
In an economy driven by an absence of tapped fossil fuel resources, Uruguay had been historically dependent on hydroelectric power, imported oil, and imported electricity from its neighbors Argentina and Brazil. Over the last 10 years, with the country’s new energy investments, Uruguay has made a dramatic shift to power generated from renewable sources and moved steadily away from petroleum-based energy generation. Data from export.gov today shows a very different picture: 98%-100% of the country’s electricity comes from renewable sources compared to just 40% as recently as 2012.
Uruguay has become a global leader in renewable energy generation, primarily from hydro (60%), with the remainder from wind, solar, and biofuels. Renewable sources not only provide Uruguayans with the power they need, but often the country is in an enviable position of being able to market an excess of wind-power generating capacity. The government is actively seeking to identify additional domestic uses, in addition to increasing exports to its South American neighbors, Argentina and Brazil. Evidence of a remarkable turnaround, in 2018, Uruguay exported 85 million USD in electricity to Brazil and Argentina.
Benefits for construction
While currently, only about 2% of Uruguay’s total energy production comes from solar sources, the potential for solar power in Uruguay is encouraging with the country receiving an average of 1,700 KW per square meter of sunlight each year. That volume of sunlight puts Uruguay on a par with sunny Mediterranean countries.
Throughout Uruguay, there is a strong emphasis on local energy production with natural priorities for solar energy including rural areas—particularly rural schools and churches far from the grid, as well as hospitals, hotels, sports clubs, and new public buildings. Legislative support and rewards for solar power have existed since 2013 and many benefits are also available under the Investment Promotion Law that offers incentives for investing in manufacturing, implementing, and utilizing solar energy.
An example of the country’s determination to use solar as an alternative is reflected in a solar thermal mandate established in 2009 by the Solar Thermal Law (Law 18.585) with additional provisions in 2011 (Decree 451/011). The law states that after 2014, all new construction and refurbishments of public buildings, hotels, health and sports facilities, where hot water is expected to account for over 20% of the building’s energy consumption, must obtain at least 50% of water heating energy from solar thermal energy. After 2012 heated pools must use solar heating unless they use a different renewable energy source.
“The energy policy of Uruguay has focused highly on renewable energies, with the ambitious goal of incorporating them in the short term and providing attractive tax benefits for that purpose,” offers Fernanda Panizza, Biz Latin Hub’s Country Coordinator and Corporate Lawyer who counsels both foreign and national companies in Uruguay. “Uruguay offers an advantageous business environment, great social stability, and fiscal incentives for investments, as well as a strong entrepreneurial responsibility.”
The framework for fiscal incentives for renewables in Uruguay was provided by Law 16.906 as early as 1998 that focused on the promotion of investments in energy. Income tax reductions for renewable electricity generation, renewable energy service providers and manufacturing of renewable energy equipment are provided by Decree 354/009. Among the benefits is an exemption starting at 90% of the tax and decreases gradually over ten years. In addition wind power equipment is exempted from Value added tax (VAT) by Resolution 67-002 (2002). Panizza adds that the act clearly set forth that “foreign investments receive the same treatment as national ones, there are no restrictions regarding capital and funds repatriation, or the transfer of profits, dividends and interests.”
Panizza describes the foundation for new architecture and construction in relation to Law 16.906 as having three pillars: Uruguay considers that a building is eco-friendly as long as it has three elements: Energy Saving, Low Environmental Impact, and Joins Nature and Architecture in its design.
Energy Saving - From a design standpoint, this type of architecture seeks to make the most of natural lighting, so that electric light is used as little as possible. Other characteristics include minimizing heat loss by improving insulation and ensuring a stable interior temperature. Heating and electric energy systems with solar panels should be included.
Low Environmental Impact - A sustainable design aims at having as low an impact as possible on the ecosystem from the moment of its construction, including seeking to use locally produced materials so as to reduce pollution incurred by transportation.
Joins Nature and Architecture - To the extent it is possible, combine nature with design, rather than construction being a barrier between what is natural and artificial.
The future of renewable energy
Uruguay has made remarkable progress, but the country’s ground-breaking energy initiatives will now have to survive a new governing party and a newly sworn in president, Luis Lacalle Pou. At 46, he is the youngest president in the history of Uruguay and, while his National Party is seen as politically right-center, his personal devotion to the conservation of the sea (he is an avid surfer) is generating some optimism among environmentalists that existing renewable energy policies will stay in place, along with the previous administration's vision for an inclusive and people-oriented strategy for energy transformation.
Regardless of political outcomes, the history of Uruguay’s successful shift to renewables offers similar small countries (and perhaps larger ones, too) a blueprint--if not just good ideas--for solid progress towards renewable energy.
[Find additional information on construction and renewable energy projects in Latin America here: https://www.bizlatinhub.com/.]