May 13, 2015 marked the first year of the enactment of Law 1715 of 2014, which established the legal framework for the integration of non-conventional renewable energy (FNC) to the Colombian energy system in order to promote the development and the use of these sources.
Colombia has a clean electricity generation matrix, and about 68% of its installed capacity comes from small and large scale hydropower. However, this dependence on water resources creates a vulnerability to climatic events. The remaining installed capacity corresponds to thermal power plants with non-renewable sources (coal and natural gas) and only 0.6% are non-conventional energy sources (wind power produces 18 MW and cogeneration with bagasse produces 77 MW).
Additionally, even if the electricity generation matrix is clean, the energy consumption pattern in Colombia has high participation of petroleum (43%), coal (10%) and natural gas (25%). This is why, in the medium-and long-term, the country must seek to diversify its energy matrix and sustainable energy system (the energy matrix of Colombia and other countries in the region can be found here).
The greatest potential for diversification of the matrix has been identified in wind power, solar photovoltaic energy (mainly in the Caribbean region), geothermal energy (where there are projects under perfectibility and design) and in the cogeneration of biomass and biogas. Currently only bagasse is tapped and to a lesser extent palm oil industrial waste for the cogeneration process. However, only the excess energy cogeneration from bagasse is injected into the national grid. In this regard, there is great potential for generation with palm oil waste, including biogas, in both the national interconnected system and areas that aren’t connected (ZNI).
With the enactment of Law 1715, and once the regulatory process finishes during 2015, the law is expected to foster the use of these renewable energy sources, facilitate access to technologies worldwide, and to develop its own high value added innovative technologies.
It is also expected boost the development of rural areas and particularly of the national electricity system ZNI. It will reactivate production and create of new forms of business. To this end, the Ministry of Mines and Energy (MME) should issue guidelines for energy policy FNCE generation in isolated zones. The law required guidelines for delivering surplus small and large scale self-generation and the connection and operation of distributed generation, among others.
To date, the MME has issued guidelines related to the delivery of surplus large-scale self-generation (Decree 2469 of 2014) and the implementation of mechanisms of demand response (Decree 2429 of 2014). On April 23, 2015 the MME also published a draft decree with policy guidelines how to apply incentive investments for FNCE projects and to manage energy efficiency. The incentives the law involves relate mainly to fiscal matters.
Colombia is taking important steps to foster the development of non-conventional energy sources. However, it is important for the development of these sources to clearly identify costs and benefits in order to avoid impacting the state fiscally.