Abstract for: Wind Power's Uncertain Future in Uruguay: A System Dynamics Analysis of Policy Impacts and Technological Opportunities

The Uruguayan electricity sector has emerged as a notable exemplar of successful energy transition, particularly with its commendable integration of significant wind capacity into the grid, owing to recent political initiatives. However, the absence of explicit plans for future capacity expansion raises crucial questions about the long-term sustainability of Uruguay’s energy policy. In this study, we employ a System Dynamics model to scrutinize the enduring effects of the current energy policy on the trajectory of the nation’s energy transition. Our analysis reveals a potential decline in wind installed capacity under the status quo. Nonetheless, embracing disruptive technologies such as electric vehicles, energy storage, and hydrogen production could not only mitigate this decline but propel the installed wind generation capacity to more than double the base scenario by 2040. While the baseline foresees a wind capacity of 1.9 GW, an optimistic scenario envisions a capacity exceeding 6 GW. Furthermore, the positive outcomes observed with international interconnections underscore the transformative potential of collaborative technological endeavors. We assert that a pivotal need for new political developments is imperative for Uruguay to sustain and augment its energy transition. Beyond managing the transition domestically, Uruguay has the potential to contribute significantly to the establishment of a global distribution network.