Transformation of the energy sector

Regulation & Policy    Sep 16, 2021 5:08 PM

The Ministry of Mines and Energy (MinEnergia) published the roadmap to transform the energy sector.

The entity prioritized 39 proposals that will be the way to seek greater reliability in energy supply, boost natural gas supply and demand, improve the targeting of subsidies and modernize the sector’s institutions, La Republica reported.

MinEnergia, Diego Mesa, said that this roadmap is the result of a joint work of more than 2 years, allowing to prepare the sector for the new challenges.

“This will allow modernizing the institutional and regulatory framework and facilitating the incorporation of new agents, technologies and transactional schemes to the energy market, which is fundamental to offer a safe, sustainable and competitively energy service to Colombians,” Mesa highlighted.

Authorities considered five main axes: competition, participation and market structure; the role of natural gas in the energy transformation; decentralization, digitalization of the industry, and efficient demand management; closing the gap, improving quality, and efficient design and formulation of subsidies, and the review of the institutional and regulatory framework of the sector.

Based on these axes and with the support of the Inter-American Development Bank (IDB) and the World Bank, the following proposals were developed:

– Promote the participation of users in the electricity market: tariffs will be redesigned to stimulate more efficient energy consumption, changes will be gradual as progress is made with the modernization of the grid, just as smart meters will be integrated in homes.

– Adjust the Reliability Charge: so that there are mechanisms for assigning Firm Energy Obligations that cover existing plants.

– Reliability in the supply of natural gas: with the liberalization of the market and the expansion of the National Transportation System (SNT) over 10 years.

– Unification of electric energy funds: Focus resources on financing strategic projects that close gaps and guarantee that the benefits reach the users who really need them.

– Strengthening and modernization of institutions and entities: New agents will be created to respond to new challenges in the sector and strengthen institutions such as CREG, UPME, SuperServicios, the National Operation Council (CNO) and the Commercialization Advisory Committee (CAC).

Bottom-Line: Undoubtedly, the Colombian government is laying a solid foundation to continue with the country’s energy transformation in the coming years.

Investor confidence, social security, and a solid regulatory framework will be fundamental to advance in the goals set.

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