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The government of Colombia expects the first quarter of 2021 to
see a significant ramping up of the country's energy transition,
with details of its latest renewable energy auction on the way
before the end of March, as well the unveiling of a 30-year
hydrogen roadmap, a senior official said 20 January.
Speaking at the Davos Energy Week 2021 conference, Minister of
Mines and Energy Diego Mesa said the government's clean energy 2021
focus will include hydrogen, offshore wind and battery storage. The
Marquez administration will also launch energy efficiency policies,
he said.
Colombia wants to be Latin America's energy transition leader,
raising renewable energy's share of the country's generation mix to
12% from about 1% currently, a target set during Mesa's time as
deputy energy minister between 2018 and 2020. The country's target
is 2.5 GW of operating renewable capacity by 2022.
Details of the 2021 renewable generation tender will be
published within the "next two months," Mesa said during a webcast
presentation.
In 2019, Colombia held what Mesa called the first "double-sided"
auction for renewable capacity, offering standard 15-year power
purchase agreements in an effort to attract investment and interest
in the tender. The tender price was 35% below the existing level,
which Mesa said was a surprise to oil and natural gas companies,
which had expressed concern that prices would rise.
Mesa expects 2021's auction-the country's second-to be similar,
although "obviously we have some refinements because we also had
some lessons learned from 2019, but we're still in the process of
developing" such changes.
By the end of Q1 2021, the government will also have laid out
the plans for the first large-scale battery capacity auction in
Latin America, Mesa said.
Hydrogen
Along that same timeline, the government will have issued the
30-year hydrogen roadmap.
Colombia is looking into both green and blue hydrogen
development, Mesa said, which he believes will be "key for our
transportation sector." Other countries in Latin America have
expressed interest in importing hydrogen from Colombia, he
said.
The country has agreed a green hydrogen research program deal
with Chile. Columbia's neighbor to the south wants to produce the
cheapest green hydrogen in the world by 2030 and to be among the
world's three largest hydrogen exporters by 2040. Columbia is in
the process of formalizing a deal with Germany and is working with
the European nation on the roadmap. The government is also working
on a hydrogen deal with the country's largest oil and gas company,
Ecopetrol, he added.
Concurrently, the government is making modifications to
Colombia's legal system to ensure it has incentives for investment
in such technologies, noted the minister.
Colombia introduced tax and commercial discounts for electric
vehicles (EV) in 2019, and, according to Rosa, had the highest EV
sales in Latin America that year. He added that sales of EVs rose
83% year on year in 2020. The Marquez administration is developing
a framework for the federal government as well as state and
regional authorities to only use EVs from 2030 onwards, he
added.
In a similar vein, in recent years, the government has been
looking at minigrids and electrification, which would be especially
beneficial to small, remote communities. Over the last 30 months,
he said, some 45,000 customers have been connected to the
electricity grid for the first time and by August 2022-when the
current administration's time in office is set to end-a further
100,000 customers can expect to be connected.
Also in the coming months, Colombia will pull together its plans
to tackle a commitment made by President Ivan Duque Marquez in
December that the country would reach net-zero emissions by 2050.
The administration is currently preparing its strategy for doing
so, said Mesa. The country plans to reduce its greenhouse gas
emissions by 51% by 2030, he added.
While cutting emissions is in sharp focus for the future, the
government is not forgetting the existing extractive industry
wealth it has been blessed with. Colombia is one of the world's top
five steam coal exporters, with shipments expected to rise in 2021
after falling in 2020, according to IHS Markit data. One way to
leverage that mineral wealth is employing carbon capture and
storage technology, Mesa said.
