At this week’s BNEF Summit in New York, pv magazine publisher Eckhart Gouras met with Colombia’s Minister of Mines and Energy Diego Mesa to discuss the state of solar in this important South American market.
It immediately became clear that the market is undergoing a major acceleration. According to Mesa, the country has installed 710 MW of solar PV to date, with most of this being grid-connected solar systems. This is substantially more than the country had in cumulative PV capacity at the end of last year.
Mesa recounted the history of solar PV adoption in his country, which was kickstarted in 2014 with legislation to promote renewables. But it would take another four years for the right policies and incentives to emerge. Accordingly, in 2018 the country had only one significant PV installation with a capacity of 18 MW. According to Mesa, this represented quite a mismatch to the heightened competitiveness of solar PV in 2018, especially in light of Colombia’s exceptional irradiation, about 60% higher than the global average.
With an improved policy environment, including attractive tax incentives, the country’s three public auctions have been a success. 2,800 MW of renewables have been awarded in these auctions, encouraging a ramp-up in major PV installations in the country. According to Mesa, “every other week I am inaugurating solar plants.” Italy’s Enel Green Power is leading the way and Colombia’s largest solar project so far was just connected to the national grid six weeks ago. Developed and owned by Enel Green Power, this solar farm in Alaloma boasts 187 MW of clean energy capacity, more than Colombia had installed cumulatively in PV by the end of last year, according to the most recent statistics published by the International Renewable Energy Agency.
Enel had already raised eyebrows in 2019 with the construction of an 87 MW PV power plant in El Paso, which is also located in the department of Cesar. Top tier Chinese PV and battery storage manufacturers Canadian Solar and Trina Solar have also spearheaded the market, with Trina developing 100 MW of PV assets, which it subsequently sold to the Colombian utility Isagen. The Canadian fund Brookfield is now the key owner of these 100 MW, of which 60 MW is already in operation. A further 40 MW is set to come online this quarter.
“Auto-generation” or self-consumption is another popular business model, especially in the country’s oil and gas sector. As the Minister revealed, “tomorrow I’m going to the department of Casanara, which is traditionally an oil and gas producing region, and we are going to be inaugurating a solar farm in one of the auction sites for one of the oil and gas companies. It’s only about 7 MW. It’s a good size for auto-generation.” Mesa also mentions two other such plants, one inaugurated late last year (61 MW) and another in 2020 (25 MW).
And just last month the country began construction of South America’s largest PV power plant, excluding the Brazilian market. Enel Green Power is behind this project as well and this 500 MW plant should be completed by the end of this year, delivering power to Colombia’s grid early next year. Mesa anticipates further price declines in the country’s public auctions, mentioning a range of US$0.025 to $0.027/kWh. But he also expects “temporary shocks” due to the ongoing PV supply chain constraints.
Public auctions will continue to act as an important policy instrument to establish a robust PV market in Colombia, but the emergence of private auctions have served to diversify the overall market. According to Mesa, more legislative action is required to introduce more competition in Colombia’s nascent distributed generation (DG) market and distributed rooftop solar seems a market that Mesa is keen to develop.
Grid constraints have further limited market growth, but the country’s transmission expansion plan passed in 2019 should improve the pace of interconnection. New on- and off-shore transmission capacity will help bring more renewable energy to the country’s load centers and this might include high-voltage, direct current (HVDC) capacity in the not-too-distant future.
But we will see significant grid-scale battery storage even earlier as part of the country’s transmission expansion plan. The other top-tier Chinese module manufacturer mentioned, Canadian Solar, was awarded a grid-supporting 50 MW battery storage project as part of a tender last summer and this stand-alone battery storage facility should start operation in June next year.
So while Colombia has been a late starter in the global PV industry, we can expect plenty of action and further investment this year and in the following years. Enel Green Power’s landmark 500 MW Guayepo project will certainly do its part to put Colombia on the map of global PV players and Canadian’s 50 MW battery storage project could mark the start of more ESS opportunities in this South American market.