Electricity transmission tariff methodology

Regulation & Policy    Jul 24, 2021 11:40 AM

The Energy and Gas Regulatory Commission (CREG) announced that it is working on the proposal to update the tariff methodology for electricity transmission.

Jose Fernando Prada, expert commissioner of the CREG, said that the entity is making final adjustments to the previously-announced proposal to modernize the wholesale market, Valora Analitik reported.

The expert said that this proposal incorporates several important modifications and the introduction of new elements, representing a significant change in market operations.

“The implementation of firm transactions in the wholesale energy market (MEM), with binding dispatches and the possibility of adjustments in several market sessions during the day, together with the joint negotiation of energy and several complementary services, represents a complete modernization of the energy market,” Prada said.

He said that the entity continues to review the application of the Reliability Charge rules and the need to have new firm energy obligation allocations for both existing and new plants.

“No substantial changes to the scheme of the charge are foreseen, we are analyzing adjustments for the procedures of competitive allocation of obligations, reviewing the auctions to have more agile procedures, with shorter schedules,” Prada said.

He said that the entity identified the need to adapt the current network code to technological advances and new market conditions.

“We are conducting a detailed and thorough study, and we will share the results this year,” Prada said.

The expert highlighted CREG Resolution 075 of 2021, through which the Commission updated the rules to make it easier for power generating companies and users to connect to the National Interconnected System (SIN).

“This resolution aims to streamline the procedures for connection to the SIN,” Prada said.

Bottom-Line: Updating the regulation to make it more flexible and agile is fundamental to accelerate the development of the sector and attract investors to the country.

Colombia has a lot of room for improvement on this issue and it is key that authorities announce new actions on this.

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