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    AUTE: the "wind revolution" and the problem of privatization

    August 4, 2022 - CE Noticias Financieras


      When the first government of Tabaré Vázquez took office, the challenges in energy matters were enormous. The memories of the struggles against the privatization ofANCAP and the creation of the regulatory units and the "Electricity Market" were still fresh in our minds.

      Also, since the first half of the 1990s, there had been no substantial investment in energy infrastructure in the electrical system, and in the early 2000s the Cruz del Sur gas pipeline failed.

      The public companies, although they remained strong due to the enormous support received by the population in different referendums and plebiscites, suffered almost 15 years without personnel income except through precariousness: scholarship holders and outsourcing. An aging and diminished workforce put the functioning of public services at risk.

      As if this combo were not explosive enough in terms of energy, bad luck meant that 2006 and 2008 were years of severe droughts, which meant that the risks of energy shortages were enormous.

      It was in this context that the progressive government drew up an energy policy plan for the period 2005-2030. This plan had a number of positive aspects, such as planning beyond the ups and downs of the market, assuming access to energy as a right and prioritizing the needs of social policies designed in conjunction with energy policies.

      Without falling into the privatization attempts of the neoliberal governments of the 1990s and early 2000s, the energy policy plan placed public companies as strategic agents of the sector while promoting a significant set of investments in energy infrastructure.

      Thus, in the decade 2010-2020, a set of investments that transformed the energy matrix of the electric power system took place, with important works in transmission, generation and distribution that allowed to go from talking about shortages and risks, to over-supply and energy exports. In turn, this abundance is explained by a very important change in the generation with fossil energy, with the construction of Punta del Tigre, but also by the bet on new renewable sources.

      This plan designed what later became known as the "wind revolution". During this period, the installed power of wind energy in our electrical matrix went from being practically nil to representing more than 1,500 MW, that is, almost a third of the generating potential. It has even come to represent more than 40 percent of the actual generation of electrical energy.

      However, there is a hidden side to this story. A facet that, far from bringing us light, has shown us darkness: The wind revolution implied a high level of privatization of our electrical matrix. Of the total investment in wind farms, only one third are with a certain degree of participation of UTE and two thirds (67 percent) are entirely of private capital. In fact, of the third in which UTE has ownership, only 11 percent are traditional public investment and the remaining 22 percent are wind farms with modalities open to other equity capital, micro-financing, among others.

      From that time on, AUTE positioned itself as a voice that denounced privatization, but its denunciations suffered the same fate as those of Cassandra in Greek mythology: it was telling the truth, but no one believed it. The energy policy authorities at that time assumed the privatization process but minimized its impacts. The discourse was that ownership was not important but control, and the UTE remained in control.

      The argument of "control" by the UTE was based on the fact that all the wind farms operated under contracts with the UTE, maintaining the UTE as a "monopsonistic" agent (sole buyer) and, in addition, the wind farms never exceeded 50 MW of installed capacity or 100 MW in exceptional cases. The installed capacity of these wind farms, compared to the installed capacity of UTE, makes them relatively powerless compared to our public company.

      The problem with this whole line of argument is that it thinks of the UTE wind farms as if they were only "energy actors". The politically fatal error is that behind these wind farms there are large economic groups. Some 58 percent of the wind farms are in the hands of large foreign capitals, where we can highlight the best known Argentine economic groups such as Bulgueroni and Eurnekian. At the national level, there are groups such as the Otegui, Rasquet and Fernandez (former owners of Fripur).

      Therefore, even though the UTE maintains a certain "monopsonistic" power, it is no longer a matter of small wind energy projects, but of having allowed large economic groups to enter a strategic sector.

      to large economic groups. As has been known for more than 150 years by the left, the ownership of the means of production is politically very important and economically decisive.

      Some of the representatives of the companies that own the parks have important links with the National Party, as is the case of Oscar Ferreño, manager of Ventus, the most relevant actor in the market today due to its capillarity.

      These private actors are pushing to radicalize the rules of the game, where they are trying to implement the ultimate goal of Minister Omar Paganini: to make UTE the "Uber of electricity". It is about turning our historic public company, once vertically integrated, into a mere platform that connects private generators with consumers (also private) and in the middle, a huge majority of the population will be held hostage, paying the costs of the service, without political weight and with increasingly exclusionary policies.

      Defending the UTE as a public company necessarily implies retracing the path of privatization. For this, the voice of the citizenship as well as that of the workers of the UTE must be heard.


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