Colombia Preps for Hammer Time

(Renews, 26.Jun.2018) – The Colombian government will next month publish the initial heads of terms for the South American country’s first ever auction for renewables other than large hydro.

Energy regulator CREG and mining and energy planning unit UPME are finalising rules and regulations ahead of the auction slated to take place by the year-end.

Deputy head of mission at the Colombian Embassy to the UK German Espejo said more than 300 projects across onshore wind, solar, biomass and small hydro have registered to participate in the initiative.

Of those projects, around 215 with a combined capacity of 1.2GW had been certified as viable by UPME, he added at the Canning House Latin America renewables conference in London.

European participants are set to include Paris-based outfit Voltalia, which is developing three wind farms rated between 50MW and 200MW in the windy Caribbean region of La Guajira.

The developer said there was limited information about the possible market design of the auction, which is expected to back at least 1GW across all technologies.

CREG has previously announced four options for incentivising renewables in its wholesale market, including a green premium added to the spot price or a sealed bid auction similar to the UK’s Contracts for Difference regime.

Renewables trade association SER Colombia has proposed auctions offering fixed priced, 20-year contracts with a centralised buyer.

Solar, wind and biomass comprise less than 5% of Colombia’s 17GW installed renewables capacity. Large hydro dominates, but is suffering from reliability problems due to dwindling water levels.

In a further effort to boost its nascent clean power sector, Bogota is offering 50% annual reduction of taxable income for the first five years of investment in renewables projects.

The country has also introduced exemptions of import duties and VAT plus accelerated depreciation for accounting purposes on equipment and machinery for use in renewables.

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Author: ENERGY ANALYTICS INSTITUTE (EAI)

Energy Analytics Institute (EAI) is a Houston-based independent think-tank providing unbiased research, analysis, commentaries, opinions and breaking news related to the petroleum sectors in the Latin American and Caribbean regions.

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