New auction of renewable energies in Colombia

Studies indicate that Colombia’s potential for wind energy in the Caribbean region is greater than 20 GW, in Santanderes 5 GW and 2 GW could be obtained in Huila.

After an attempt of success, the Government prepares a new auction of renewable energies for October of this year. Offer energy by blocks, according to the time of day, among the possibilities to attract participating companies.
The administration of Iván Duque returns to roll the dice in an electrical auction, scheduled for October this year, which seeks to strengthen the foundations of a market for clean networks, which are expanding around the world at the rhythm of climate change.
With the participation of a significant number of non-traditional renewable energy generators, the wholesale market would be stronger and there could be downward pressure on the price of electricity. In recent years, the price of energy in the stock market has always been on the rise.

By 2022, the government’s purpose is to move from 50 MW (which requires a city like Ibagué) to 1,500 MW (which Medellín and Cali require together), from capacity in renewable energy sources. That is to say, it passes in less than 1% in the Colombian energy matrix to reach 6% of alternative renewable sources with solar, wind or biomass energy, mainly.

Currently, about 70% of the energy produced in the country comes from water sources. This makes our womb considered the cleanest sexual world in the world, according to the World Economic Council. However, it also allows us to be one of the countries most vulnerable to climate variability, argues the Ministry of Mines and Energy.

“Colombia’s high dependence on hydroelectric resources puts it at risk of reducing energy,” says a study by the Mining and Energy Planning Unit (UPME). However, the president of the Colombian Association of Generators of Energy (Acolgén), Angela Montoya, believes that the Colombian electricity system is reliable, that it has survived five El Niño phenomena and has not been shut down. The system has responded to Colombia. “
For its part, the Minister of Mines and Energy, María Fernanda Suárez, recalls that “in its first year of management, the government of the president has made the revolution of renewable energies a reality in Colombia.” The civil employee emphasizes that with the auction of load by reliability (of last February) that maintains that the participation of this type of energy in the energetic matrix of less than 50 megawatts to about 1,400 megawatts of installed capacity, to the year 2023. “This it is almost 30 times the current one, that is, going from less than 1 to 6% of the participation of renewables in our matrix, in any case, in a greater diversification and resistance to events of climatic variability such as El Niño “, stand out

A renewed auction

Then, in the year of February of this year with the auction of renewable energy sources, which ended without awards, the Ministry of Energy and Energy concentrated on October 31. Several guilds, such as Acolgén, Andeg, Asocodis, Asoenergía and la Andi, made recommendations to the Government.

The ministry recognizes the observations and comments of the different interest groups and the agents of the sector, seeking the best balance of the conditions for the sellers as well as for the final benefit for the users.

According to the Ministry, one of the changes more than the generators is that energy can be obtained in the blocks of schedules that adjust to the characteristics of non-renewable energy sources projects (such as wind or sun). Block one would go from 00:00 hours until 07:00; The two from 07:00 hours until 17:00, and block three from 5:00 p.m. until 12:00 p.m.

“This way, each generator can make his energy and price offers, in one or several blocks, considering what best fits the generation profile of his plant (solar, wind or biomass)”, highlights the Ministry of Mines and Energy.

Explains that, additionally, in the two years following the start date of the electricity supply obligations of the awarded contracts, which will be on January 1, 2022, the seller may cover his obligation with other market mechanisms. Also the increase of the term of 12 to 15 years of duration of the contracts seeks to improve the conditions for the financing of new projects from unconventional sources of renewable energies that may participate in the auction. The change of the minimum capacity of the projects from 10 to 5 megawatts can expand their participation in this new contracting mechanism between generators and marketers.

For buyers, one of the main attractions is the type of contract that goes from “pay what is generated” to “pay what was contracted”, with which the generator commits to supply a fixed energy to the buyer during the agreed block schedule and the marketer is obliged to pay the contracted energy to the generator, regardless of whether he consumes it or not. “In this way it is guaranteed full certainty to marketers in the delivery of energy with a stable price, which can benefit the final consumer”, explains an official of the Ministry.

The president of the National Association of Generating Companies (Andeg), Alejandro Castañeda, makes objections to what is related to the ceiling price established by the Energy and Gas Regulation Commission (CREG). “Now we can award the contract taking into account the weighted average,” he says.
 Undoubtedly, installing a significant amount of clean energy sources would avoid the high and uncertain operating costs of thermal plants. “Colombia could act strategically to protect itself against the risks derived from the dependence on hydroelectric resources, through the development and use of other renewable energies instead of seeking the expansion of its thermal generation park based on fossil fuels, which currently mainly depends on of natural gas “, considers the UPME.

Relying on thermal plants for power generation opens the door to further upward pressure on electricity rates, due to a possible shortage of gas in the country and the urgency of having to import it.

With the auction for green energy generation, complementarity and a diversification of generation sources, such as biomass, solar, wind and geothermal are sought to continue with the reliability of the system, says Ángela Montoya.

UPME itself admits that large energy consumers, such as industrialists, are looking for alternatives “to reduce their electricity bills in a sustainable manner, and renewable energy could be part of the solution portfolio”. The report argues that “at the level of the wholesale market, an increase in the number of renewable energy generators participating in this market could also create a more solid and liquid wholesaler, creating downward pressure on spot market prices (sale or purchase). of assets with immediate delivery) “as a consequence of the low costs associated with non-conventional sources of energy such as solar, wind power and geothermal.

As for solar power, the country has an average irradiance of 4.5 kWh / m2 / d (kilowatt hour per square meter-day), which exceeds the world average of 3.9 kWh / m2 / d. According to the Atlas of solar radiation of the UPME, La Guajira, a good part of the Atlantic Coast and other specific regions of Arauca, Casanare, Vichada and Meta, have radiation levels above the national average that can reach 6.0 kWh / m2 / d.

The truth is that the new energies are going to require some support, and since their volatility is so high (when there is no sun and air) they require having attentive hydraulics and the thermal park available and there may be an effect of higher reliability payment in the future, when they begin to generate and complementary services, the affectation for the users will depend on all this.