Less thermo generation by 2025?

Regulation & Policy    Jan 14, 2022 2:50 PM

Generating companies spoke about Resolution 133 of the CREG, and how this changes the way in which existing thermal plants are remunerated.

They said that this resolution will put the reliability of the system at risk because it will take out of play generation equivalent to 450MW from thermal plants by 2025, La Republica reported.

Andeg said that the country will need a new reliability charge auction to add new capacity to the system to fill the projected gap in 2024 and 2025. This is due to the fact that the so-called reliability charge scheme puts at risk the stability of the plants that provide support to the market.

Alejandro Castañeda, Executive Director of Andeg, explained that thermal plants have contributed close to 80% of the firm energy that the system has had in recent years.

The resolution would leave thermal generators at a disadvantage compared to hydro generators, since the reliability charge is only 12% to 20% of the cash flow for hydro generators, so the bulk of their income comes from the sale of energy through contracts on the energy exchange. While for thermal plants, this income may represent more than 90% of their cash flow.

However, the Minister of Mines and Energy (MinEnergia), Diego Mesa, said that the resolution proposes an efficient mechanism to assess the charge in existing plants.

Andesco’s Camilo Sanchez said that the resolution puts stability at risk, even more so in times of critical hydrology.

Sanchez said that the mechanism leaves aside that the price existing plants receive is efficient and derived from an auction process, which reflects market updates.

Bottom-Line: Yes, Colombia is in a process of energy transformation but this will not happen in two or three years, this will take time and thermal plants will continue to be important for the energy matrix in the short and medium term.

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