The Ministry of Mines and Energy of Colombia has rescheduled the second long-term renewable energy auction to late October 2019. Colombia's first long-term renewable energy auction was launched in early 2019 and attracted bids totalling 1,500 MW from 27 companies, but was declared void over competition concerns in February 2019.
The auction will be open to new renewable power generation projects of 5 MW and more to be commissioned before 1 January 2022. Eligible technologies will include wind, solar, geothermal, small hydro and wave energy. Power generators and buyers will make their offers on specific time blocks (between 0 AM and 7 AM, from 7 AM to 5 PM and from 5 PM to 0 AM) and power generators will commit to provide a guaranteed amount during the time block. The power purchase agreements, whose length has been extended from 12 years (February tender) to 15 years, will start on 1 January 2022 and will be based on a "pay what is contracted" model, with buyers agreeing to pay the contracted energy instead of paying for their withdrawal. The Energy Mining Planning Unit (UPME) will collect offers from generators and buyers and will then announce the maximum amount of energy that will be auctioned. It will set a maximum amount of energy to be purchased for the participants to receive the contract. The energy regulator CREG will set a maximum price ahead of the auction.
Under terms published in early 2019, the February 2019 tender process would have granted contracts for the supply of 1,183 GWh under 12-year power purchase agreements (PPAs). The projects were initially slated for selection in March 2019 and due to start generating power in 2021.
About 70% of Colombia's power generation capacity stems from hydropower plants, while the remainder comes from thermal assets. Under its Ideario Energetico 2050 policy issued in 2015, the government aims to add at least 474 MW of wind energy capacity, 143 MW of solar, 275 MW of geothermal and 314 MW of cogeneration with biomass by 2028, i.e. a total of 1,207 MW in renewable energy capacity addition. The auction was expected to be a key component of Colombia’s efforts to boost its installed renewable capacity.
Do you want to become an expert on renewable energies auctions?
Discover our very detailed and regularly updated RES auctions database with worldwide coverage and a technical focus backed by academic research.
With our renewable energies auctions service you will be able to monitor auctions at a global level. Its (expanding) scope notably includes all major G20 countries and offers an especially fine tracking on Europe and South America.