Uruguay minister says energy rationing possible

Mon May 4, 2009 9:01pm EDT
By Conrado Hornos
MONTEVIDEO (Reuters) - Uruguay may have to impose energy rationing due to a severe drought that has drained water reservoirs and slashed hydroelectric power generation, the country's energy minister said on Monday.
The South American country last year spent about $500 million -- or 1.7 percent of its gross domestic product -- to import electricity from neighboring countries and buy fuel to stoke power plants amid an energy shortage.
The start of this year boded even worse for energy supplies, but government officials expect the outlook to improve in the coming months.
"The situation is complex .... We're not saying we'll impose restrictions as of tomorrow, but if this situation continues or gets worse, we may have to," Energy and Industry Minister Daniel Martinez said at the Reuters Latin American Investment Summit in Montevideo.
"The state has done a very good job of lowering its consumption levels (but) we may have to seek the public's collaboration. We'll have to see."
Uruguay has the capacity to generate about 1,500 megawatts (MW) of power at hydroelectric plants, 800 MW at thermoelectric plants, and nearly 100 MW using renewable energies.
But Martinez said hydroelectric generation is at one of its lowest levels in the last century, and the country is importing electricity from Argentina and Brazil to help make do.
The minister said he expects the energy crunch will have a smaller impact on government finances this year than last since global crude oil prices have fallen so sharply.
But with economic growth slowing abruptly amid a global recession, the government has nonetheless revised its 2009 fiscal deficit target to 2 percent of GDP from 1 percent previously, due to the drought and slack global trade flows.
(Writing by Hilary Burke; Editing by Richard Chang)