The Miami Herald
Sunday, May. 25, 2008

Uruguay drought creates energy crisis


First, the escalators stopped. Then shadows crept across the city in what appeared to be an epidemic of dead light bulbs.

As winter approaches, Uruguay has found itself in the grips of an intensifying energy crisis, brought about by a three-month drought that has crippled the country's hydroelectric power generators. The scarcity -- at a time of record high prices for imported oil -- is prompting strict conservation measures.

For a while, the drought had little impact in Uruguay's capital, where nearly half of all Uruguayans live and there is ample drinking water. But after the third unusually dry month in a row, President Tabaré Vázquez has initiated Phase 2 of the national ''Plan to Save Energy,'' ordering businesses and homeowners to cut their energy use deeply.

To avoid the first scheduled blackouts since 1989, half of all elevators and escalators at shopping malls and supermarkets must be put out of service. At apartments and private homes, lights in gardens and patios are now contraband, lending the appearance of abandonment even at upscale buildings with underground garages and water views. Noncompliance is punishable by energy shutoffs ranging from three hours to five days.

''To overcome this energy crisis,'' Vázquez said in his executive order, ``we need everyone's commitment.''

Rainfall returned to parts of the country in recent days. But it did not appear to be enough to compensate for the dry months and allow a lifting of the restrictions.

In many places, such as shopping centers, the conservation recommendations are largely in place. To cut energy use by 10 percent, for example, elevators at the national energy company's headquarters have been programmed to stop at alternate floors, employees are being sent home at sundown and signs in shadowy hallways direct staff to the marble stairways for short trips.

''Without a doubt, people are worried,'' said Claudia Viurrarena, browsing a jewelry display recently at the Punta Carretas mall, where the walls are papered with signs apologizing for the frozen escalators. ``The predictions are bad.''

Along Montevideo's main downtown boulevard, 18 de Julio, the energy crisis is also apparent. At night at the store La Selva, bags of maté, Uruguay's national drink, are lit by moonlight and its red neon sign has been unplugged. At the display windows at the Indian Emporium, the eight flood lights that normally brighten leather boots and wool sweaters are now strictly ornamental.

It is unusually quiet at the Artemis electronics shop, chockablock with motorcycles, washing machines and coffee makers, where 30 television sets normally compete for attention.

''It's much easier to sell a TV with images and sound,'' said manager Fernando Perez, 37. ``This complicates things.''

The scarce rainfall registered first in agricultural areas, where vegetable and fruit growers watched their irrigation ponds dry up and their customers at farmers' markets grumbled about undersized apples and pears.

Vázquez initiated the first phase of the conservation measures on April 14, banning outdoor entertainment at night and instructing public agencies to cut energy consumption by five percent.

In all, Uruguay received 3.3 inches of rain from March 1 through May 10, 4.4 inches below average, according to the National Institute of Agricultural Research. It rained less than an inch last month, and there has been no significant rainfall in May.

That has so slowed the Río Uruguay, on the western border, and the Río Negro, in the center of the country, that Uruguay's four hydroelectric plants are almost completely disabled. In the Río Negro, the government is preserving what little water remains at the dam for the winter months. On the Río Uruguay, the largest dam, by the city of Salto, is operating at 20 percent of capacity and the energy it produces is shared with Argentina.

Normally, the dams are the pride of Uruguay, producing 80 percent of the country's energy needs, according to government statistics. Last winter, they satisfied all domestic demand, idling the costly oil-fired plants in Montevideo.

Now, those plants are burning imported oil day and night to feed the grid, draining the government treasury. The state energy company, UTE, already has spent more than $300 million in 2008, after budgeting $340 million for the entire year.

The price of the oil UTE buys, though heavily subsidized to forestall electricity rate hikes, recently jumped by 5 percent. It has almost doubled in the past two years, although that increase has not been passed along to customers.

Even operating at capacity, Uruguay's power generators are falling short. With no domestic oil or natural gas, the country is now at the mercy of Argentina and Brazil to provide electricity because the oil-fired plants in Uruguay are already operating at capacity.

''If it rains, we're independent,'' said Magdalena Marinoni, one of three members of a government commission implementing the president's energy saving plan. ``If it doesn't, we're not.''