The government enabled distributed generation in Colombia in February 2018, allowing self-generation through renewable energy sources by private residential, industrial and commercial users.
Authorities have promoted this type of on-site generation, Valora Analitik reported.
Income tax deductions, VAT exclusion, duty exemptions and accelerated depreciation for renewable energy projects are some of the benefits announced.
Andres Gonzalez, Eneco’s Sales Manager, said that all these measures are strongly boosting the distributed generation market.
However, he warned that project approval times are not advancing at the pace promised by the Law.
“They are increasingly being respected but there are still delays that impact our ventures,” Gonzalez said.
CREG Resolution 030/2018 states that for projects with installed power less than or equal to 0.1 megawatts (MW), the grid operator will have five working days to pronounce on the technical feasibility of the connection.
Gonzalez said that the processes usually takes between one to two months.
“We have had cases where the delays were longer,” Gonzalez said.
The expert explained that these delays are complex for companies that have their projects in a high degree of development, with investment disbursements that need to move forward.
It is important to remember that Eneco is currently developing projects for 250 kilowatts (kW) and will begin to assemble others for 300 kW soon.
Bottom-Line: Authorities must work on improving regulatory processes as these are affecting the development and progress of important energy projects in Colombia.
The country has a great potential in renewable energies, but these problems may diminish investors’ interest.