• Colombia’s installed capacity is mainly located in the center of the country, where the hydroelectric power plants and some thermal power plants are located.

  • The effective capacity of power generation in 2020 was 17,484.71 MW, in which 63.16% was produced with water resources (11,043 MW), 29% with thermal resources (5,122 MW) and the 7.54% remaining with smaller, cogenerated and self-generating generation plants.

  • The Colombian electricity sector contains a mixture of public and privately-owned companies. Deregulation in the 1990s opened the sector to private investment and established a wholesale electricity market.

  • <meta charset="utf-8" />A push towards the development of the country’s non-hydroelectric power capacity has attracted new investment in wind and solar power projects as well as the transmission infrastructure needed to support their development.

  • The National Interconnected System (SIN) connects 48% of the national territory and covers 97% of the population. The non-interconnected zones (ZNI) represent the remaining 52%, a total of 17 departments, 1,441 municipalities and 625 thousand people. Currently these areas produce energy with Diesel.

Opportunities and reasons to invest in the Colombian energy sector:

  • The Colombian government established a regulatory, institutional and market scheme that aims to diversify the energy matrix. The goal is to increase 50 times the installed capacity in alternative sources from 50 MW in 2018 to 2,500 MW by 2022. According to the Energy Plan 2050 published by the UPME, the participation of non-conventional renewable energies is projected to reach 25% of the energy matrix in the next couple of years.

  • According to the World Economic Forum, Colombia is the second country in South America and third in Latin America in the Energy Transition Index.

    • Colombia was designated by the UN as Global Champion to lead the thematic axis of the energy transition in the framework of the High-Level Dialogue on Energy that was part of the United Nations General Assembly in September 2021.

  • Colombia has a well-established mechanism to secure the reliability of the energy system in the long run. The reliability charge scheme ensures energy supply for all users of the country connected to the grid, especially during extreme climatic phenomenon such as El Niño to its privileged geographical position, Colombia has a high potential to develop renewable energy generation projects such as:

    • Photovoltaic: Average daily radiation 25% higher than the world average (4.5 KWH / M2). According to the UPME (Energy and Mining Planning Unit), the regions with the greatest potential for solar energy generation are La Guajira, San Andres, Bolivar and Boyaca.

    • Wind: The wind power generation potential for the implementation of wind plants is more than 25GW, among the highest in Latin America, according to the World Bank's Energy Sector.

    • Biomass: According to the UPME, the country's energy potential from biomass is enough to supply 46% of national energy demand.

  • There are more than 185 power generation projects registered in UPME at stages II & III, with an installed capacity of 10.755,41 MW.

    • Solar: 7,315.93 MW, 140 Projects

    • Wind: 3.030,4 MW, 16 Projects

    • Other Technologies: 409,08 MW, 31 Projects

  • There are 19 transmission projects in execution for USD2.053 million. In 2021, the UPME will launched 17 calls, currently there are 7 projects in pre-publication stage for more than USD$100 million investment in transmission expansion projects. The UPME will published the 2020-2034 Generation-Transmission expansion plan.

  • The Government´s Natural Gas Provision Plan considers the construction of the Regasification Terminal of the Pacific in Buenaventura Bay and the Pipeline between Buenaventura Bay - Yumbo municipality with an estimated investment value of USD 700 Million. The government expects to select the contractor in November 2021, beginning operations in April 2026.

Colombia's New Renewable Auction

  • In October 2021, the government carried out the third Renewable Auction. The auction marked a new milestone in the Energy Transition by allocating obligations for nearly 800 megawatts (796.3), equivalent to the consumption of 800 thousand Colombian families. With this new installed capacity, the share of non-conventional renewable energies will increase from 0.2% in 2018 to more than 15% in 2023.

  • 11 solar projects were awarded contracts at the auction, which will begin to fulfill their energy supply obligations as of January 2023. These projects represent a reduction of 465 thousand tons of CO2 per year and contribute to meeting the goal of reducing the country's emissions by 51% by 2030.

  • The contracts will have a duration of 15 years and were awarded to 9 generating companies and 53 distributors and closed with a weighted average allocation price of $155.8 pesos per kilowatt hour.

  • These 11 generation projects represent investments of around 3.3 trillion pesos and close to 4,800 jobs in the 9 departments where these new generation projects will be built.

  • Through the complementary mechanism, additional obligations were assigned to 4 generating companies, with 5 projects with a capacity to generate 335 MW to 46 trading companies.

  • The country has 15 solar farms, 9 large-scale self-generation projects and more than 1,500 small-scale self-generation photovoltaic solar projects, which contribute a net effective capacity of 388 MW. In addition, 1,200 MW of private generation and self-generation initiatives and 1,365 MW of solar and wind energy that won allocations in the 2019 auction are under construction in different regions of the country.

New Technologies

  • The government's clean energy 2021 focus will include hydrogen, offshore wind and battery storage systems .

  • The Mining-Energy Planning Unit (UPME) launched in 2021 the first public call in Latin America for large-scale batteries Energy Storage System – BES, with a capacity of 45 MW, which will generate greater reliability in the provision of the service in the Colombian Caribbean. It was awarded in July to the international investor Canadian Solar and will enter in operation in June 2023.

  • Green hydrogen, an alternative for Colombia's energy future. The government launched a 30-year hydrogen roadmap in September, which can place Colombia as a potential green hydrogen exporter.