Acolgen comments

Regulation & Policy    Jun 16, 2021 5:08 PM

Acolgen’s Natalia Gutiérrez spoke about the energy transition and coming auctions.

The expert told Portafolio that the energy transition process necessarily involves the increasing inclusion of low-emission generation sources.

“We hope that the auction of long-term contracts will be successful and allow us to continue diversifying our matrix,” Gutierrez highlighted.

The expert said that a priority issue is the entry into operation of the awarded projects.

“The penetration of new technologies in the system must be harmonious with the existing legal and regulatory framework, maintaining the market principles on which the sector has been built,” Gutierrez said.

She explained that managed, centralized and technology-differentiated mechanisms should be temporary, understanding that they distort and segment the market.

“Unconventional renewable technologies have reached cost parity with conventional ones,” the expert said.

Gutierrez added that auctions should be based on market schemes with technological neutrality and voluntary participation, especially for regulated users.

She said that the country will have enough firm energy by 2022, according to the ENFICC vs Annual Demand balance published by the UPME.

“However, the country will need to give the necessary impetus so that projects under development can meet their entry dates with the goal of guaranteeing energy until 2026,” Gutierrez said.

The expert said that small hydroelectric power plants (SHPs) are characterized by providing the system with a zero-emission electricity service, given their renewable status.

“The regulatory framework has allowed the low-scale use of one of the greatest strategic advantages of our country, the abundance of water resources for electricity generation,” Gutierrez concluded.

Bottom-Line: The country needs to diversify its energy matrix, and solar and wind generation are positioned as interesting backup sources for the medium term.

Natural gas is the main alternative for the short term and the government must do more to incentivize generation with this low-emission fuel, while unconventional renewable sources gain ground and reliability.

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