The government presented the National Development Plan (PND) for its analysis and this has generated much discussion. The PND aims to boost the electricity demand from renewable sources, but this has created controversy.
According to Portafolio, the government aims to force the purchase of electricity from renewable sources through an article in the PND, creating controversy among members of the energy sector.
Energy associations asked the government to eliminate this possibility, because they consider that it would be a setback in the development of the electricity market in the country.
Acolgen, Andeg, Andesco, Andi, Asocidis and Asoenergía sent a letter to Iván Duque, President of Colombia, asking for the elimination of the article that contemplates this possibility.
“The mentioned article can affect the growth of the electric system which is supported under the premise of efficient prices,” the letter says.
The associations commented that this could increase supply concentration and distort the economic signals that “incentivize the efficient portfolio of resources for the servicing of demand in the long term.”
The letter said that this proposal is a step in the wrong direction, since the costs of unconventional sources are competitive and should be integrated into the system.
The Energy and Gas Board of ANDI sent a letter to María Fernanda Suarez, Minister of Mines and Energy (MinMinas), and to Gloria Alonso, Director of the National Planning Department. The Energy Board showed its support for not forcing the purchase energy from renewable sources.
Experts said that prices could increase up to 12.4% per kilowatt generated, as a consequence of this article.
On the other hand, German Corredor, Executive Director of SER Colombia, said that the government’s proposal would help boost renewable energies. He commented that this initiative has been applied in other countries with total success.
Bottom-Line: The PND is now approved so in one sense the debate is over. But we doubt the major players will let something so important pass.
After the long-term auction – now expected in 4Q19 – the government will probably re-examine this clause in the light of how much renewable / unconventional capacity gets offered at what price.