The generation of electric power In the hands of private companies it is already a reality. From the sector they claim it as a matter of free competition, which should positively impact the price and quality of the service. In the last year, the completion of a business between two private companies is considered a milestone, which could have good continuity.
In the last ten years, significant progress has been made by the private sector in the generation of electric power. According to a study published by the consulting firm Exante In April 2023, in that period the private companies reached a 40% share in generation, which reduced costs by 44%.
“Let us remember that this is a generation sector that, although it has not been a monopoly since 2002, in fact it was until some private actors began to appear, first was the pulp industry with the large plants that brought their own generation and that dumped part of their surplus energy into the grid,” he said. Martin BocagePresident of AUGPEE (Uruguayan Association of Private Electricity Generators) to Ambit.
” Then came a whole process where the private sector entered, which means that today we have a much more robust system in the face of these climatic events. Of course we have a much more environmentally friendly system that is in line with what we all want, which is to eliminate carbon from our production matrix,” added the specialist.
At the same time, this year the first purchase and sale of electrical energy between private parties took place: the Coca-Cola Femsa Uruguay It will work with the renewable energy that will be provided by the company’s Albisu photovoltaic panel farm in Salto. Atlántico Sustainable Infrastructure, while the state UTE will charge a toll for the use of its transmission and distribution network.
“We see it as something very positive, let’s hope this is the way. This competition caused UTE to also start competing and lower rates because users can access this free energy market, where they can choose who to buy from. On the other hand, there is also the rest of the market such as regulated customers, who cannot choose and that is where we believe that we also have to improve by generating the cheapest and most competitive energy,” said Bocage.
Despite these advances, the government recognized the need to adjust the regulatory framework in the face of a second energy transitionto improve business conditions and encourage private investments.
“We want to promote competition in the generation sector. We believe that this will be positive for the electricity sector and for the entire population, which will be reflected in lower rates and maintaining very good quality of energy. To do this, we must “upgrade” the regulatory framework and, above all, tear down some barrier that prevents private companies from being able to compete in that market.
It was an important milestone this year to recognize the power of the non-conventional renewable energies. That was one of the barriers that the government eliminated this year and I think it is a very positive sign,” said the president of the Uruguayan Association of Private Energy Generators.
Compete with the State?
“I hope they don’t feel that way,” said the representative of the private business sector. “Competition makes us better at all levels, it makes us better people, better companies. What we have to do is sit down, public sector and private sector, and look forward and ask ourselves how we want this generation market to work to make it more efficient and more competitive. There are cases in Uruguay that are very, very paradigmatic of how the competition of a sector improved, for example, the case of cell phone“, he pointed.
The discussion could be part of the political agenda in the middle of an election year. For Bocage “it is an ideal year for these discussions to take place between the technicians of the political parties, between representatives of the state sector and for us to have this type of discussions about what sector we want for the next ten years,” he concluded.