Paraguay generated 51.8 billion kilowatthours (Bkwh) of electricity in 2004, while consuming only 3.1 Bkwh. Almost all of the country’s electricity consumption comes from a single facility, the bi-national Itaipu hydroelectric dam (see below). Paraguay is one of the world’s largest net exporters of electric power. In 2004, Uruguay generated 8.2 billion kilowatthours (Bkwh) of electricity and consumed 9.9 Bkwh. To make up for this shortfall, Uruguay imported electricity from Argentina and Brazil.

Paraguay's state-owned utility, Administracion Nacional de Electricidad (ANDE), controls the country’s entire electricity market, including generation, distribution and transmission. It operates a single hydroelectric dam, Acaray, and six thermal power plants, with total installed capacity of 220 megawatts (MW). The company is also responsible for Paraguay’s share of two bi-national hydroelectric facilities (see below). ANDE operates 2,100 miles of transmission lines and 670 miles of distribution lines. Over 92 percent of the country has electricity service.

The Administracion Nacional de Usinas y Transmisiones Electricas (UTE) is responsible for transmission and distribution activities in Uruguay, as well as most power generation. The Unidad Reguladora de la Energía y Agua (URSEA) has principle regulatory oversight of the sector. In 1997, Uruguay changed its electricity laws to permit independent producers to generate power, introducing competition to the sector. However, UTE has the option of taking 40 percent stakes in any new power plants built by private developers.

Paraguay operates two hydroelectric dams in cooperation with its neighbors: Itaipu (Brazil) and Yacyreta (Argentina). The Itaipu dam is the largest hydroelectric facility in the world, though, once completed, the Three Gorges Dam in China will be larger. Itaipu has 18 generators and a total installed capacity of 12,600 megawatts (MW), evenly shared between Paraguay and Brazil. In 2004, Paraguay consumed 16 percent of its share of Itaipu production, exporting the rest to Brazil. Yacyreta, completed in 1999, has 20 generators and a total installed capacity of 3,500 MW. Paraguay consumes less than 1 percent of its share of Yacyreta’s production, exporting the rest to Argentina. In September 2006, Ente Binacional Yacyreta, the binational company responsible for operating the facility, announced that it was cancelling the planned Ana Cua expansion of the facility.

Four hydroelectric facilities provided the bulk of Uruguay’s electricity generation: Terra (152 MW), Baygorria (108 MW), Palmar (333 MW), and Salto Grande (945 MW). The remainder of the country’s electricity generation comes from thermal power plants and mobile diesel generators, which UTE only calls upon during peak demand, or when weather conditions suppress output from its hydroelectric facilities. In May 2006, Uruguay and Argentina launched a binational study on a proposed new hydroelectric facility near Salto Grande with an installed capacity of 265 MW.

Under normal weather conditions, Uruguay's hydroelectric plants cover the country’s electricity demand. However, seasonal variations can leave Uruguay at a severe power deficit, forcing the country to rely upon imports or costly oil- and diesel-fired generators. In 2001, UTE announced a tender for a new, 400-megawatt (MW), natural gas-fired power plant that would help diversify the country’s electricity supply. However, a combination of factors forced Uruguay to withdraw the tender in early 2005, including the election of a new president in early 2005, questions regarding the future of natural gas imports from Argentina , the cost of the facility ($200 million), and the construction time (26 months) of the project. Instead, UTE offered a substitute tender for the construction of two small, 100-MW turbines capable of consuming either natural gas or fuel oil. UTE awarded this tender to General Electric (GE) in August 2005, with GE committing to build the first plant within 180 days of finalizing the contract.

As mentioned above, Paraguay is a major exporter of electric power to neighboring Argentina and Brazil. Uruguay, on the other hand, must often import electric power due to season variations in its hydroelectric output; on average, electricity imports peak in March. Most of Uruguay’s imports come from Argentina, which reached 1.5 Bkwh during the first nine months of 2006. In recent years, Uruguay has begun to also import increasing amounts of electricity from Brazil. During the first nine months of 2006, it imported 0.8 Bkwh of electricity from Brazil. Uruguay has also proposed the construction of additional infrastructure to support greater Brazilian exports, including a new high-tension transimmion line between the two countries and new, coal-fired power plant in southern Brazil that would target the Uruguayan market.