Which Regions have the greatest prospects for renewable energy investment in Colombia?

November, 2020

Energía Estratégica Latam has published a regional diagnostic performed by Markup Consultores regarding renewable energy and environment.

For the electricity sector, 2019 will be a historic year in terms of renewable energy and the environment. Auctions performed in February and October 2019, related to reliability charges and long-term contracts respectively, will enable the country as from 2022 to achieve benefits from energy produced by 14 new solar and wind power projects, with an installed capacity of 2085 MW  (which will be equivalent to 10% of the country’s generation). As a person born and raised in the region of Santander, I asked myself how was the performance of my region in the February and October 2019 auctions, and the result was not encouraging. None of the solar and wind power projects that were awarded are located in Santander. Thus, a new question arose: Which were the Regions that contributed to these accomplishments?

The first place goes to la Guajira where 9 wind power projects will be developed. These are equivalent to 76% of the renewable and non-conventional capacity, and this is possible thanks to the privileged feature of this part of the country: the wind flow. Cesar holds second place with 2 solar projects that represent 11%. Meanwhile, Córdoba, Tolima and Valle del Cauca contributed altogether to the remaining 13% with photovoltaic projects.

Despite the results, my intention to understand Santander’s role in renewable energy and the environment did not cease. Therefore, I resorted to the database of the Energy Planning Unit -UPME (“Unidad de Planeación Minero-Energética” (hereinafter, UPME), where I found that nowadays Santander occupies the second place in solar and wind power projects that are in development stage (specifically, they have feasibility studies that correspond to Phase 2). Consequently, the total value in the development stage corresponds to 1389 MW (equivalent to 1.5 times “Hidrosogamoso”) represented in 13 projects located in Cimitarra (900MW), Barrancabermeja (390), Los Santos (80 MW) and Zapatoca (19MW).  It is important to notice that the main role of Santander depends on the development of 700 MW Sebastopol project.

 Table 1 

Source: UPME – Power BI: Electricity Generation Project Registration Report

Another way to evaluate the performance of the Regions regarding renewable energy and the environment is through the development of self-generation projects. These consist of the production of power to attend the own needs of a company, and the interesting thing about this option for companies is that energy costs might be reduced by up to 50%.

According to the UPME, nowadays in Colombia, there are 222 solar self-generation projects in operation, approved or pending, which add a capacity of 187 MW. Moreover, when comparing regions in terms of capacity under construction, Valle del Cauca occupies the first place with 88%, followed by Cauca with 9% and Antioquia with 2%.

Notwithstanding, once compared to the number of solar self-generation projects, regardless of size, the results displayed that Antioquia is the leader Region by adding 64 companies, which have chosen the installation of solar panels to supply their own needs. Furthermore, Valle del Cauca is next with 33 companies and Santander with 24 companies.

Table 2 

Source: UPME – Tableau: Applications for Self-Generation and Distributed Generation

In conclusion, the regional diagnosis places La Guajira, Valle del Cauca, and Antioquia in the first places. Additionally, the number of 222 solar self-generation projects reflects that there is still a huge potential for companies to take advantage of this alternative to reduce energy costs, be more competitive and to contribute to the fight against climate change. As for Santander, it occupies the second place in contrast to the solar and wind power development projects and the third place in photovoltaic self-generation initiatives. However, to maintain these leadership positions Santander: i) depends on the success of the 700 MW Sebastopol solar plant located on Cimitarra, ii) needs to encourage more companies to install solar self-generation in order to reduce not only costs but also greenhouse gas emissions.