New energy auction

Energy    Nov 18, 2020 3:20 PM

The government announced a third long-term auction for 2021. This is what industry experts had to say.

“(The auction) will be for projects that are in operation before December 2022. In just 27 months, we have multiplied by five the installed capacity of renewables in the country and in the next 22 months, we will do it 20 times more”, President Iván Duque said.

The President’s announcement, however, was not free from controversy, as industry sources wondered why announcing the measure, if there had already been two auctions in 2019 for energy projects that will be developed in 2022.

For Alejandro Castañeda, executive director of the National Association of Generating Companies (Andeg), there is no point in calling a new auction to put additional megawatts into the system, when there is supply to spare due to the drop in demand derived from the pandemic.

“It makes no sense to call a new auction to add more electricity into the matrix, regardless of whether the market is regulated or unregulated, because there will be an oversupply,” he said.

Natalia Gutiérrez, executive president of the Colombian Association of Electric Power Generators (Acolgen), told Portafolio that the government’s main priority is to assure that this process represents a benefit for end consumers, specifically in terms of price and reliability, with efficient offerings in the system.

The Vice Ministry of Mines and Energy (MinEnergia), Miguel Lotero, explained that the main focus of the auction is to allocate the energy that results for the consumption of large commercial and industrial energy consumers that carry out production processes (goods and services), and that keep the economy alive.

Bottom-line: The planning stage of every project is key to assure its future success. As much activity as the economy needs right now, authorities should not neglect experts’ opinions, as they too have valid arguments and have a lot to ‘bring to the table’ now that the potential auction is in its first stages.

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