Colombia launches first RE auction

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Colombia’s Ministry of Energy and Mines has announced that the country’s first auction for large-scale renewable energy projects will be held on February 26. The auction, which was originally scheduled to be held on January 2, had been postponed by the Colombian government in early November at request of all interested investors and developers, the ministry said at the time.

In its new statement, the ministry specified that through the auction it will allocate 1,183,000 MWh per year, and that winning developers will be awarded a 12-year PPA. In its previous announcements, the Colombian Government said the PPAs would have a duration of 10 years.

Selected new projects will have to be grid-connected by November 30, 2021; meanwhile, power plants that have been operational since December 31, 2017, will also be entitled to participate in the auction.

“Our goal in these four years is to increase the installed capacity of renewables from 50 MW, which is what today a city like Ibague needs, to at least 1,500 MW, equivalent to what Cali and Medellín need together,” said the Colombian Vice Minister of Energy and Mines Diego Mesa.

On January 4, the ministry will provide more details on the kind of PPA that will be granted through the auction, while Colombia’s national mining and energy planning unit UPME will release the auction’s bidding terms.

Through the technology-neutral auction, which is expected to assign between 1 GW and 1.5 GW of renewable energy capacity, the Colombian authorities will select solar, wind and biomass projects with a capacity of over 10 MW.

In an interview with pv magazine last year, the president of Colombian solar energy association SER Colombia, Alejandro Lucio Chaustre said that the auction may deliver final prices close to those seen in Argentina and Brazil. “Let’s say we expect a final price between US$40 and $50 per MWh,” he said. The association had asked the government to grant 15-year PPAs through the auction.

Colombia is currently supporting solar and renewables through this auction mechanism and the 2018 Resolution CREG 030, which regulates distributed solar generation (up to 100 kW) and distributed generation from renewable sources (between 100 kW and 1 MW).