Most countries have been adding renewables to their grid in fits and starts; what Uruguay was attempting was an overhaul of its entire grid. The fact that no models existed for such a massive project allowed the planners to come up with solutions that suited the country’s unique needs, but it also meant that they would face steep learning curves on everything from drafting contracts to stabilizing a grid that would be powered by variable natural resources.

The cross-party agreement became the bow on a package of policies and decrees that laid the foundation for an energy revolution whose success and speed would take everyone—even its protagonists—by surprise. Fortunately, Uruguay had never succumbed to the wave of neoliberalism that had led so many other South American governments to sell off their public utilities; the country still owns its oil refinery, its telecommunications company, its water and sanitation utilities, and other public services. Recognizing the importance of publicly owned services, the Frente Amplio had begun in 2005 to invest in utilities on a scale that hadn’t been seen in decades, allowing Méndez to place UTE firmly at the heart of the energy transition.

But given that Uruguay’s GDP was just $41.95 billion in 2010, the government was wary of funneling an estimated $7 billion of public money into the huge renewable energy projects that would have to be undertaken in order to transform the grid. Instead, the leftist party chose to ask private companies to take on much of the financial risk. Méndez was clear from the outset that despite this involvement of the private sector, the Uruguayan public would maintain control over the energy generated through its state-owned utility. The new policy also explicitly declared that no private company would be allowed to develop market dominance. Finally, by requiring private power companies to either use any electricity they generated for their own consumption or sell it to UTE, the plan ensured that electricity would become a de facto public good, Méndez argued.

As Méndez helped to hammer out the cross-party agreement, Casaravilla, the engineer involved in Uruguay’s first wind turbine installation, was appointed director of UTE by President Mujica to lead the country’s green energy revolution alongside Méndez. In 2011 and 2012, the two leftists watched as onshore wind farm proposals finally poured in at competitive prices. This time around, the tenders resulted in the potential to power nearly 1.2 million homes solely with wind power—nearly every residence in Uruguay.

All of the contracts with private wind farms were set up as purchase-power agreements (PPAs) between a private generator and the publicly owned electric utility, guaranteeing that all electricity generated over 20 years would be paid for by UTE, the sole entity in charge of transmission and distribution, at an agreed fixed price. The government’s bidding process required companies to help bolster local economies by employing local workers, using local materials, and investing in local infrastructure to strengthen the grid.

Starting in 2010, when the cross-party agreement was signed, it took Uruguay less than a decade to reach its goals. From 2017 to 2020, 97 percent of the electricity generated in Uruguay came from renewable sources, making it one of the first countries in the world to reach that level—and, perhaps most importantly, the first to green so much of its grid in such a short period of time.

It wasn’t just the timing that made Uruguay a worldwide reference point for green energy. We’ve all heard the tired arguments against relying on renewables: The sun doesn’t always shine. The wind doesn’t always blow. Uruguay’s renewables revolution proved those arguments wrong, demonstrating that by diversifying energy sources it’s possible to stabilize energy output under variable climate conditions—even without expensive battery storage solutions. In other words, so long as a grid doesn’t rely on a single source, it can be resilient in the face of changing weather—as well as in the face of geopolitical shifts that can push energy costs to shocking highs without warning. To further diversify the grid’s exposure to weather conditions, the leaders of Uruguay’s energy transition also made sure to spread renewable generators across the country’s 19 departments—while also spreading the country’s new “green” wealth.

The map of Uruguay’s electrical grid today is starkly different from that of 2008, when the majority of power was generated at a few hydroelectric dams north of Montevideo and the rest at a handful of fossil fuel plants in the capital. It’s now possible for the entire grid to run several hours a day entirely on wind power. In 2016, even before several more renewables projects went online, it hit 94.5 percent green energy. In 2019, according to an analysis by the Uruguayan company SEG Engineering, the country ran on 98 percent renewable energy. Hydroelectric accounted for nearly 56 percent of generation, wind 34 percent, bioenergy 6 percent, solar just under 3 percent, with fossil fuel coming in last at 2 percent. Wind energy came in second only to hydropower, accounting for nearly 34 percent of the energy generated in Uruguay that year. And here’s the real kicker: Not only did Uruguay create more energy in 2019 than it had in any previous year—14,000 gigawatt hours—but it also sold more electricity to Argentina and Brazil than ever before. For decades, Uruguay was a net importer of energy, but that began to shift in 2013 when it became a net energy exporter. In 2019 alone, Uruguay exported 2,994 gigawatt hours to Brazil through two international connections, and to Argentina from the Salto Grande Dam—over a fifth of its overall energy generation—adding over $70 million to government coffers. Since 2019, energy has become a significant export for Uruguay, with some years bringing in hundreds of millions of dollars in revenue.

In most of the world, when anyone mentions the need to transition to renewables, climate change dominates the public discussion. And yet in Uruguay, the greatest existential threat of our time was often an afterthought. The country’s drive toward clean energy came instead from economic necessity—and is still talked about in terms of financial savings, employment, efficiency, and sovereignty. The fact that it would also reduce national carbon emissions—and boy, did it—was the cherry on top of the energy pie. Uruguay was never a huge carbon emitter. When the South American country hit its highest carbon emissions ever in 2012, the average Uruguayan put 2.6 tons of carbon into the atmosphere; that same year, the average individual American carbon footprint was more than 16 tons. In 2017, as Uruguay nearly completed its transition to renewables, that number plummeted to 1.8 tons—even though average energy consumption had actually increased.

In fact, despite a population increase of nearly a third (and economic growth multiplying by more than 20 since 1975), Uruguay consumes less fossil fuel today than it did 50 years ago. As he negotiated Uruguay’s contributions to the 2015 Paris Agreement, Méndez promised an 88 percent cut in carbon emissions by 2017 compared with the 2005–09 average, a goal the country easily reached as even more of its renewable generation projects came online. A year after the Paris Agreement was signed, Fortune magazine named Méndez one of the world’s 50 greatest leaders for his role in steering Uruguay’s green energy revolution.

Méndez looks a bit scruffier than his picture in Fortune these days, having grown out a stubbly gray beard to match his somewhat unruly gray mop, but his passion for renewable energy hasn’t faded one iota. The former national director of energy has left government and gone back to teaching at UdelaR, alongside Gonzalo Casaravilla, José Cataldo, and other fellow veterans of Uruguay’s energy transition. Méndez has also been helping other Latin American countries draft their “national stories” to aid in their own transitions to renewables.

To Méndez, the difference between the Frente Amplio’s approach and those of other governments was the insistence on the state’s responsibility to distribute electricity, guaranteeing the right to energy and treating it as a public good that should be protected and made accessible and affordable. According to his calculations, laid out in a detailed analysis he drafted for the United Nations and the World Bank’s International Comparison Program, the transformation of Uruguay’s grid brought in more than $6 billion in public and private investments over less than a decade—money that was distributed to all of the country’s departments, with $2 billion spilling into other parts of the economy, such as construction. A 2021 study by the Uruguayan Association of Private Electricity Generators found that electricity costs would have increased $132 million every year after 2010 had the country not transitioned to clean energy. Instead, annual generation costs have plummeted: Whereas the threat of a $2.5 billion bill loomed large in dry years, the country now spends less than $700 million on average to keep the lights on. The savings, Méndez says, were used by the state to fund anti-poverty measures that helped to bring unprecedented prosperity and growth to the country.

And yet therein also lies one of the most controversial aspects of Uruguay’s green transition. Rather than use the huge renewables savings to slash consumer energy costs, UTE continued to raise electricity prices—though for as long as Casaravilla was head of the public utility, the increases were kept below the rate of inflation. Neither Casaravilla nor Méndez agreed with the decision to use the savings to fund other government programs rather than allow Uruguayans to feel the benefits of green energy directly in their wallets, but it was ultimately out of their hands.

“The day the minister of economy told me the renewables savings were going to fund other programs was one of the worst days in my tenure as national director of energy,” Méndez told me, vehemently shaking his head.

It was a choice that opened Méndez to a lot of criticism over the years, and still does. He’s gone to great lengths to show how, because of the rise in salaries over the 15 years that the Frente Amplio was in power, the relative cost of electricity compared to purchasing power has decreased significantly. Still, ask almost any Uruguayan, and they’ll tell you the price of electricity is too damn high.

“For all Uruguayan families, the electricity bill is a significant monthly cost,” my landlord in Montevideo told me when he showed me how to use my apartment’s new air-conditioning unit, which doubles as a heater in winter.

“Too high, just too high! We need to sign to get costs down,” a group of elderly women exclaimed on a drizzly evening in Salto. The four women, lifelong friends who were eager to tell a newcomer about their grandchildren and the new restaurant in town, were referring to the Uruguayan tradition of signing mass petitions to push for governmental change. And they have a point: Uruguay’s consumer electricity rates are among the most expensive in South America, according to a 2019 analysis by SEG Engineering—though they are still well below the 10 highest rates in the world.

In response to this disparity, the electric utility’s own union, the Association of Employees of the National Administration of Power Plants and Electrical Transmissions (AUTE), has been campaigning for fairer energy costs for over a decade. In a 2024 interview with the German journal Lateinamerika Nachrichten, the AUTE’s general secretary, Jhony Saldivia, argued that energy rates—especially residential rates—have been unjust, because “he who has more pays less and he who has less pays more.” Studies conducted by the union have found that “the average working-class family spends 4 to 5 percent of its income on electricity, while the poorest spend 10 percent,” and that “a working-class family in Uruguay pays 10 times more for electricity than a businessman,” because of the difference between business and residential rates.

The AUTE has also intensely criticized the PPA contracts with private generators, a policy that represented a major departure in a country where all aspects of energy had been under the control of the state-owned utility until the green energy transition. Uruguay has been stuck with the fixed prices set in the 10- and 20-year PPAs with private companies. Those prices were competitive at the time they were negotiated, but they have become increasingly less so as the costs of renewable energy technology have decreased over the years.

And there is an even more troubling factor at play in these contracts, according to the union’s president, Gonzalo Castelgrande. “The wind in Uruguay has been practically privatized,” Castelgrande said in a 2017 article published by the energy justice group OPSur. “It has been expropriated in favor of a set of multinational companies, accounting for almost 40 percent of the electricity demand, and almost 90 percent of the resources are under their control.” To Castelgrande and other critics, the fact that the transmission and distribution of electricity remained under state control is simply insufficient—and they aren’t alone in that argument.

“Some people, myself included, wanted to keep renewable energy generation entirely publicly owned,” Casaravilla told me. “We simply didn’t have the money to do it.”

There are plenty of good reasons for energy generation to remain in the state’s hands. To begin with, that would decrease the reliance on foreign capital and private companies for the provision of what Uruguay—and many other countries—consider a public good. But large infrastructure projects require capital beyond the resources of a small national economy.

Given the level of public funds that were available, Casaravilla had set out to devise funding models that would make it possible for UTE to be involved in the newest wave of clean electricity generation, too. Under his watch, the utility successfully developed seven medium- and large-scale wind generators with various ownership models—including a number of projects funded in part by a “Small Savers” program, which allowed Uruguayan citizens to invest in UTE-run wind farms, in one case with as little as $100.

In fact, the first wind farm in Uruguay was set up in 2008 on Cerro de los Caracoles, where Casaravilla and Cataldo had installed the country’s first wind generator eight years earlier. Owned and run by UTE, it was named Caracoles I and has a generation capacity of 10 megawatts; Caracoles II was set up nearby two years later with another 10 megawatts of capacity. Although—as with every wind farm in the country—the Caracoles turbines are maintained by a private company (in this case, the turbine manufacturer Vestas), UTE’s wind farms are able to generate electricity without a PPA, since the end product is not being purchased from a private company. In 2014, UTE started Juan Pablo Terra, another wind farm, this time in the department of Artigas, with a whopping 67.2 megawatts of capacity. By opening and running some of the first wind farms in the country, the utility was able to bring the technological know-how in-house, Casaravilla argued. It gave Casaravilla, among others at UTE, a detailed understanding of what it took to develop, build, operate, and maintain a wind energy generator—knowledge he relied on when dealing with private wind companies.

Casaravilla insists he’s always considered the distribution of electricity a tool for the redistribution of wealth—and this was something he refused to forget during his decade-long tenure at the electric utility. One of his goals as the head of UTE was to bring electricity to every household in the country, no matter how remote—something he worked on in tandem with the renewable energy transition. Under the electrical engineer’s watch, by the end of his tenure, 99.9 percent of the nation’s homes had electricity—both on and off the grid. (In 2025, UTE announced that all of the remaining homes in remote places had gotten electricity at long last.) Uruguay also became the first country in Latin America to connect all of its rural schools to the national grid.

Thanks to the sweeping efforts of Casaravilla, Méndez, and many others during the years that the Frente Amplio was in power, on March 1, 2025, after a five-year pause (during which the center-right Partido Nacional took the reins of government), the Frente Amplio returned to power without having to worry about rolling energy crises. Yet the economy has been slow to recover from the Covid-19 pandemic, leaving the country struggling with higher poverty rates than before the crisis. So perhaps it is not surprising that the newly elected president, Yamandú Orsi, wants to emphasize affordability as part of a renewed commitment to the party’s clean energy agenda. The history teacher and former mayor promised in his five-year plan that “renewable energies will continue to be promoted,” including increasing exports of clean energy and greening public and private transportation—with state-owned utilities leading the way. As for lowering the price of electricity amid a cost-of-living crisis, Orsi has promised to reinstate the discounted energy rates he says 180,000 Uruguayans lost while the Frente Amplio was out of power. It remains to be seen whether the new left-leaning president will correct his predecessors’ missteps and, at long last, help ordinary citizens feel the benefits of the country’s record-breaking green energy transition in their pocketbooks.

For all the shortcomings of the Uruguayan green energy revolution, as wealthier nations around the globe struggle to achieve even a portion of what the South American nation managed in under a decade, the Uruguayan example shows not only what is possible but what is actually achievable given sufficient commitment to quitting fossil fuels in our time.