Colombia Schedules its First Auction for Renewable Projects

Colombia’s Ministry of Energy and Mines recently announced that the country’s first auction for large-scale renewable energy projects will be held on February 26. Initially planned to be held on January 2nd, the auction was indefinitely postponed by the government in early November at the request of all interested investors and developers.

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In its new statement, the ministry has specified that the auction will be held on the 26th of February and through it, the government will look to allocate power generation capacity of 1,183 GWh per year and the winning developer will be awarded a 12-year Power Purchase Agreement (PPA). The ministry has also increased the duration of the agreements from 10 years in the previous announcements to 12 years.

Selected new projects will have to be grid-connected by November 30, 2021, and power plants that have been operational since December 31, 2017, will also be entitled to participate in the auction.

The ministry said it was looking to diversify Colombia’s power mix, complement and boost its competitiveness and make it more resilient to climate change. “Our goal in these four years is to increase the installed capacity of renewables from 50 MW, which is what today a city like Ibague needs, to at least 1,500 MW, equivalent to what Cali and Medellín need together,” said the Colombian Vice Minister of Energy and Mines, Diego Mesa.

Through the technology-neutral auction, which is expected to assign between 1 GW and 1.5 GW of renewable energy capacity, the Colombian authorities will select solar, wind and biomass projects with a capacity of over 10 MW. The ministry will take into account four criteria to evaluate bidding contracts: resilience, the complementarity of resources, regional energy security and reduction of carbon dioxide (CO2) emissions.

In November, Finland’s Energy Agency launched the country’s first technology-neutral auction for large-scale renewable energy projects. Project developers from either of wind, solar, biomass and wave power will be eligible to compete in the auction. Through the auction, the agency aimed to contract annual clean electricity production of 1.4 TWh, excluding hydel energy, with the annual monetary support for the auction estimated to be around €7 million.