Rules for energy auction

Energy, Regulation & Policy    Mar 4, 2021 3:49 PM

The Ministry of Mines and Energy (MinEnergia) published for comments the rules for the third auction of long-term supply contracts in Colombia.

The entity highlighted that this auction will take into account projects from Unconventional Renewable Energy Sources (FNCER) that have a capacity equal to or greater than 5MW.

Projects with a capacity between 5MW and 20MW that wish to participate must declare that they accept, for the duration of the contract, centralized dispatch, Portafolio said.

MinEnergia said that only new projects will be able to participate or those that have not signed power supply contracts in the last auction.

The entity said that the goal is to expand the installed generating capacity with projects that contribute to the sustainable reactivation of Colombia in 2021 and 2022.

These projects must be in the UPME energy generation project registry, at least in phase 2. In addition, they must have the concept of connection to the national transmission network or a regional network approved by the entity.

“Colombia multiplied the installed capacity of unconventional renewable energy sources by more than 7 times with more than 225MW in 2020,” MinEnergia Diego Mesa recalled.

The expert said that projects under construction will help increase installed capacity 50 times by 2022.

“With this new auction, we will continue to diversify our energy matrix, making it more resilient to climate variability and contributing to the reduction of carbon dioxide emissions,” Mesa highlighted.

Bottom-Line: The bet on renewable energy continues to increase in Colombia and this new auction is proof of this. There will, as with the last auction, be complaints from traditional generators about the restriction to new, unconventional projects but the legal challenges are already in the past.

The government showed with actions its commitment and intention to promote new energy sources. It is essential to leave a solid regulatory framework and bring the sector closer to the communities to avoid problems in the future.

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