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Tuesday, March 28, 2023

Electricity consumption grew due to the drought and UTE had profits of US$162 million

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The board of the state electricity company approved the balance of 2022 in a context in which electricity demand continues to grow amid the water deficit that affects energy production.

Photo: @UTE_ComCorp

In the midst of an extreme drought that affects everything Uruguay and for which the rains are not enough, the electrical consumption grows in the country to the point of reaching record daily figures and assuming the National Administration of Power Plants and State Electric Transmissions (UTE) expenses of 100 million dollars in fuel to generate energy, above the imports of electricity. In this context, the state company registered less than half the profits in 2022 than in 2021.

The figures were already in sight at the end of the year, when the rate increases for this year were being studied: UTE would close with surplus after the third quarter left profits of 230 million dollars. The last months of 2022 brought higher expenses due to the drought that was already beginning to affect the flows in the hydroelectric dams —producers of 40% of the country’s energy— in the midst of increasingly higher temperatures; but the financial health of the company made it possible to face them without major inconvenience, just as it had done between January and April.

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In this scenario, the balance sheet of UTE registered earnings of 162 million dollars during the past year, equivalent to 6,663 million pesos, as confirmed by the president of the entity, Silvia Emaldi, to The Observer. These numbers emerge from the document approved by the company’s board of directors, amid the growing need to further increase the share of renewable energy —and with concrete medium-term plans to invest in solar power generation.

The number is positive, although if compared to the profits obtained during 2021, these were reduced by more than 50%. This is mainly due to the fact that, at that time, the exports of energy were record and accounted for 80% of the profits.

More consumption, more sales in the domestic market

In the midst of a strategy to import energy from Brazil and Argentina to reduce the expenses involved in the production of electricity in the thermal parks —which came to mean losses of 2.5 million dollars a day for the purchase of fuel from the National Administration of Fuels, Alcohol and Portland (Ancap)—, domestic consumption showed significant growth: in February the daily consumption record was broken, with 42,636 MW/h, and this week it was on the verge of exceeding the historical figure again.

This increased demand is accompanied by increased sales in the domestic market, as observed in the balance sheet of UTE. During 2022, they totaled 1,610 million dollars —66,230 million pesos—, which implied an average production growth of 5.4% compared to 2021, with a significant participation of general consumers (SMEs) and residential.

As for the disbursements from the effects generated by the drought, the figure reached 9,217 million pesos (224 million dollars). In terms of exports, income was 163 million dollars or 6,730 million pesos.

Although it is barely two and a half months into the year, it remains to be seen how this first quarter of water deficit will affect UTE’s profits, in the midst of historical consumption and energy imports. It should be remembered that the government approved for the state company the possibility of taking a contingent credit for 70 million dollars; something that, if used, will also influence the company’s balance sheet.

Source: Ambito

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