Columbia’s Growing Renewable Energy Market: Interview with Columbian Minister of Mines and Energy Diego Mesa

Columbia has managed to multiply the installed capacity of renewable energy sources by 25 times, with a peak capacity of 734.15 MWp, which is equivalent to the consumption of 557,222 families and contributes to the reduction of 938,287 tons of CO2 per year. 
Columbia’s Growing Renewable Energy Market: Interview with Columbian Minister of Mines and Energy Diego Mesa
Diego Mesa announcing Columbia's first gold mining round.

In August 2018 the country had only two projects, one wind and one solar, with an installed capacity of 28.2 MW. We currently have 20 solar farms, 2 wind farms, 10 large-scale self-generation projects and more than 2,500 small-scale self-generation photovoltaic solar projects. However, the closing of President Duque's government will see more than 1,500 MW of projects installed and close to 900 MW more under construction to come into operation at the end of 2022, being one of the fastest expansions of renewables in the world.

REM talked to Columbian Minister of Mines and Energy Diego Mesa to find out more.

Can you please give me a basic background about Colombia’s renewable energy portfolio and its planned programme of clean energy expansion

I’ll start by saying that the main public policy for the sector has been energy transition, and obviously energy has different parts. One of them has been the incorporation of viable renewable energy at a massive scale in Colombia. And here, I have to start by saying that, you know, when we came into the Administration back in 2018, we started at a very low base. At that point in time Colombia's share of viable renewable energy in our power matrix was about 0.2 percent so basically nothing.

We only had a total of about 28 megawatts (MW) of installed capacity. We had pilot projects, wind projects in the north part of the country and small solar farms and that was it, there was nothing else. Despite having a law that was passed in 2014, with incentives for viable renewable energy and most important of all with significant resources, I mean, wind and solar radiation in Colombia is world class, way above the world average. So it was a bit intriguing that we didn't have a lot of development.

The first task was to improve the policy framework for viable renewable energy. And the way we did, this was we modified that law from 2014 in our national development plan. We basically levelled the playing field to be able to attract foreign investors as well as the incumbents that were already in the electricity Market in Colombia.

We complemented some of this tax incentives with an auction programme and then we've also included something like an RPO – a Renewable Purchase Obligation for utilities to be able to buy at least ten percent of electricity that they offer to end consumers coming from viable renewable energy.

I have to say, as well, that the background was that even though the shared viable renewable energy or non-conventional renewables, as we call it in Colombia, was very low, but Colombia's power matrix depends on, to a large extent, another renewable source, which is large hydro. So, about 70 percent of our power matrix comes from large hydro, so started with a very clean matrix anyway.

So we implemented the policy changes, we ran the auctions – we’ve run three so far – and I can say that in four years we've been able to transform this sector in Colombia. So, out of the three auctions we’ve conducted so far, we’ve been able to award more than twenty eight hundred 2888 MW compared to the 28 MW that we had back in 2018, so multiply that by 100 in the course of just four years.

We're going to end up in 2022 with about 12 percent of the share, in the power matrix. So from 0.2 percent to 12 percent and we have a significant pipeline for the next three to five years. So, around 5,000 MW in addition to what's going to be installed over the next six or seven months.

And I'll just complement that first question by saying, that one of the objectives that we had with all these changes was to be able to attract new companies to Colombia, and that's been very successful. So we are able to have now companies like EDF from France, EDPR, ENGIE from Portugal, ENGIE from France as well, and Green Yellow. When we look at Spanish companies, you have Grenergy, we have Solarpack, we have Elawan, we have Acciona. We also have a number of UK companies, we have Canadian and American companies, so now it’s a very competitive field in viable renewable energy and growing. So that's kind of like a quick high level summary of what we have done over the last four years.

What are the main renewable energy technologies that Colombia has installed thus far and which ones are you focusing on in particular as you expand clean energy in the country?

Sure. So I think one of the biggest expansions has been in solar PV. Solar PV has grown exponentially between 2018 and 2022, and it's grown at different scales. So we have solar farms like the one we inaugurated about a month ago with the President, which is close to 200 MW in Cesar [this is the El Paso solar plant in Cesar, Northern Columbia, brought online by Enel Green Power in 2019] to a lot of 10 MW, 20 MW solar Farms. We even have leveraged all this to get [power] to off-grid towns in rural communities, to provide electricity, not to the grid but to households, mini grids in many areas.

That would technology No 1. No 2 is obviously onshore wind. We have the first commercial project brought into operation in January this year in La Guajira. There's a second one that's finishing construction as we speak and will be ready to be inaugurated in about three to four weeks, also in La Guajira, and there are at least three other projects in the construction phase right now, also in La Guajira, that in total sum up close to about 800 MW in wind and the pipeline is very large for the next 6 to 18 months in onshore wind.

We've also got into geothermal. We have the two first pilots in operation for geothermal renewable energy. We've also worked on biomass, we have the first forest biomass project in operation and we have two more projects in the pipeline.

And, thinking about new technologies for the future, we are very focused on low and zero emission hydrogen. We are ready to put the first two green hydrogen electrolysers in operation in Columbia and we're looking at offshore wind. Our offshore wind resource is very very high, with wind speeds of 13 metres per second in some of the areas in Colombia with a capacity factor of up to 70 percent. So like a large hydro project. So we're focusing on that for the future, over the midterm and long-term, and to conclude here, something that I haven’t mentioned is that we are also working in a lot of storage. So last year we held the first auction in Latin America for large-scale storage with batteries and the plan is to have a lot of additional storage to this in the next coming years.

Are there particular areas of the country, over other areas, that are suitable for deployment of renewables and are there areas that that favour particular technologies?

Sure. So I think for onshore wind, definitely the best area in the country is the northern part, close to the Caribbean coast, specifically La Guajira, but even coming down to the other Departments like Magdalena, Atlantico, Bolivar, they are where you find the best wind. Onshore, we’re talking about wind speed on average of about 9 metres per second, which is quite good by world standards.

I think for solar PV, it's pretty much spread throughout the country and is obviously significant in the northern part, and in the plains as well. We've seen a lot of development in some parts of the Southwest so I think solar PV it's everywhere, even in the main cities you see a lot of development in small scale projects and that's been widespread.

For offshore wind, which is part of the future, definitely again but in shallow waters less than 70 metres of depth in the Caribbean coast. That's where we're focusing in this project. With offshore wind, it is not as good in the Pacific Coastal area. We've been able to conduct some measurements and found that area is not as competitive as the Caribbean coast.

You mentioned many companies the Colombian government is already working with to expand renewable energy across the country, but I was wondering if you want to say any more about the government’s main partners.

In addition to a lot of the energy or electricity companies that I mentioned before, another thing that we're seeing is a lot of the oil, gas and mining companies are also getting very active in generating electricity with viable renewable sources. So we could also say that Colombia's oil and gas and mining products are now being produced with clean energy.

Renewables are usually fairly intermittent. Can you say a bit more about how you're doing with expanding energy storage to mitigate that problem?

Yeah, so we're very privileged by the fact that we have, as our base load, mostly large hydro. So, over time, viable renewable energy gets more traction and more assured, used as a natural storage device, the large hydro projects. I said as well that we’ve included the first auction for large-scale storage with batteries. In this case though, it wasn't to compliment the intermittency of variable renewable energy but it was actually an auction for services in the regional grid in one of the departments in Colombia.

As we continue to expand, we don’t see any issues with intermittency and this is something we discussed with the system operator in Colombia, we could easily reach up to 25 30 percent of the total share of the power matrix and still be okay in terms of the grid and the durability of the grid.

Has the recent global increase in energy prices affected deployment of renewables in Columbia and if so how?

So with all those difficult issues we’ve had over the last couple of years, and more acute with not only covid but what happened in Ukraine, we've seen some delays in some of the shipments, some projects got three or four months delay, there was a shortage of solar panels for a while last year and that created some of the delays but it's something that the companies are getting used to. I also know some issues in some of the wind projects, in which the providers of turbines didn’t hedge that properly, some of the input materials, but no significant impact. There has been some delays, it was expected, but all the projects continue to be on the same course.

Given Colombia's geographical location, do you have any problems with heat induced degradation affecting the efficiency of solar PV? If so how are you dealing with this?

That's not have been an issue. It’s something to keep on the radar but so far, no problems. It may be part of the explanation is that we have very new products that are being put into operation. So no noise or heat degradation that we are aware of.

With regards to transport, how many people are converting to electric vehicles in Colombia and how it is being supported in the country by expansion of charging facilities?

Two very good questions. Colombia has also designed a very good policy framework for electric mobility and, as of 2019, we became the number one country in EV sales in Latin America. In absolute terms, we were able to surpass Chile and Dominican Republic. We had double-digit growth in 2020, double-digit growth in 2021 and this year is growing at the same rate. In some cases, we even have three-digit positive growth. Our goal for this four-year term was to have 6600 electric vehicles exclusively without taking into account hybrids. We surpassed that goal by about 20 percent. We’re over 8,100 electric vehicles registered already in the country and a significant portion of this is coming from mass transportation. We have the second largest electric bus fleet in the world, after China obviously, there’s a significant gap between us and China, and it's something that's going quite well. The tax incentives and commercial discounts are working quite well and we expect this to be a continuing source of significant economic development.

We've also worked on charging stations. This is also growing as we speak. We now have corridors between the main cities in Colombia in which you can use your electric vehicle. For example, between Bogota and Medellin, Bogota and Cali, Bogota and other intermediate cities and that's something that's been expanding. We decided to standardise chargers as well and that’s proved to be a good decision now, and that’s another market that’s growing significantly.

Given that large areas of Columbia are either forested or farmed, how extensive is Colombia's anaerobic digestion and bioenergy sector?

Good question. We have in bioenergy a significant production of ethanol and biodiesel. We have mandated blend. So 10 percent of gasoline has to be blended with ethanol, mostly produced in Columbia from sugarcane, not from corn, as in the US, and the same for diesel. 10 percent of the diesel has to be come from bio sources, especially from palm oil, and we're working on having other types of biodiesel, a project working on bio jet fuel as well and projects to develop that. So we have good days and there's a lot of experts, especially in biodiesel, but we have incorporated it in especially the transportation sector.

What are the country's main clean energy targets, going forward?

Going forward, the future is around both offshore wind and on hydrogen. We have significant potential with solar PV and onshore wind, it already has its own dynamic right now and it's going to continue to grow at a very high rate. I think we need to focus a lot on getting projects developed at a commercial scale for low and zero emission hydrogen beyond the pilot that we put into operation and to get the first offshore wind commercial project in place. We're launching the competitive tender for the first pilots on offshore wind, working with the industry but I think those should be the targets of Columbia to be the first country in Latin America to develop commercial scale, offshore wind and commercial scale low and zero emission hydrogen.

That was my last question, so if there’s anything I've missed then go ahead or anything you want to add?

No I think I think we've covered pretty much everything on energy transition. Colombia's now very well positioned and well regarded by international investors and the community on what we've done to develop renewable, energy sources. We’ve seen the energy transition level championed by the UN, the World economic Forum has recognised us as the most advanced energy transition in Latin American in 202, same with the World Economic Council.

So we've seen the results of these policies, as not only an expansion of installed capacity in onshore wind and solar, but also in electric mobility and storage. With the roadmap for hydrogen and offshore wind attracting a lot of interest, I think we’ve pretty much covered it. One final point maybe, we've leveraged viable renewable energy also to close energy gaps. So we've been able to bring electricity, for the first time, to households in rural areas, upgrading 30,000 households with solar PV and batteries. Overall, when you include interconnections and other sources, we're getting to about 80,000 now and the goal is to get to 100,000 by 2027.

For additional information:

El Paso Solar – Enel Green Power

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