Energy & Mining

Hub of Power


It is not just the dynamics of supply and demand that have been shifting; production methods are also moving away from traditional power generation techniques. The country is now moving […]

It is not just the dynamics of supply and demand that have been shifting; production methods are also moving away from traditional power generation techniques. The country is now moving in favor of hydroelectric power. In 2012, 64% of electricity generated came from hydro while 32% came from natural gas- or coal-fired plants, with the remainder being produced by co-generation and renewables. However, with such a heavy dependence on hydro, the country must be mindful of the El Niño weather phenomenon. In 2010, hydropower contributed to 67% of all electricity generated while thermal comprised of 27%, a year which showed signs of El Niño weather conditions at the beginning. In 2011 with no conditions usually associated with El Niño, this shifted to 78% hydropower and 16% thermal. The weather factor can play havoc with local climates and arid environments can experience extreme flooding, while normally very wet locations can suffer from drought. The unpredictable nature of the phenomenon could leave the country short of power if sufficient back ups are not installed to deal with lower outputs from hydro plants. El Niño years happen between every two and seven years. It was in fact because of particularly bad El Niño in the early 1990s that the government began privatizing parts of the electricity network. “The infrastructure was not in place, and the country had to ration energy in 1992 and 1993,” Federico Echavarrí­a, General Manager of AES Chivor, explained to TBY. The government assessed the situation at the time and deemed the best solution was to start deregulating the electricity sector. The question going forward for Colombia is how to make use of its abundance of hydroelectric potential while also having enough back-up power in place to deal with any potential effects of an El Niño year.

In order to create a stable supply and instill confidence in the sector for investors, the Energy and Gas Regulatory Commission (CREG) introduced a reliability charge scheme in 2006. This would guarantee a fixed price to generators during times of scarcity, thereby creating a steady supply of electricity. Since the scheme came into effect, commitments have been made by companies to install an additional 4 GW of power. In November 2012, Alstom International won a tender set out by Empresas Públicas de Medellí­n (EPM) to supply equipment to the Ituango hydropower plant on the River Cauca in the Antioquia department. The contract is worth $216 million, and when it is finished will be the largest hydroelectric plant in the country generating 2.4 GW of power. Alstom International will supply eight 300 MW turbines and generators, with the first four expected to be installed by 2018 and the remaining four by 2021. Endesa is also preparing to expand its power generation portfolio, with such projects as the expansion of the Salaco plant to 144 MW. It aims to increase its total installed capacity to 3,500 MW over the next two years. Energí­a de Bogotá (EEB) is planning large investments with 35% of its $2.2 billion global fund earmarked for Colombia over the next four years. The government has opened up four projects for tender, of which EEB has won three. They will include high-voltage projects of 230 kW in the departments of Armenia, Valle, and Tesalia, which will also connect to the power-generating projects in Quibo. What is more important for EEB is that is also has three network connections to neighboring Ecuador.

Colombia’s main aim now is to find customers for all the electricity it is producing. “Technically speaking, there are no barriers or restrictions to becoming interconnected across the continent,” Juan Jorge Celis Neira, President Colombia at Alstom International explained how in theory exporting electricity from Colombia shouldn’t prove to be a problem. However, at the moment there are still some technical issues regarding control centers and software, but this is slowing being worked through. In 2000, Colombia exported zero electricity, yet this has increased to 1.68 GWh per day in May 2012. In May 2013, exports had risen by 351.99% to 7.59 GWh per day according to Compañia de Expertos Mercados (XM), the nation’s interconnector to the wholesale energy market. At the moment, Colombia’s main export partners are its neighbors, including Ecuador and Venezuela. Total exports in 2011 were 1.54 TWh. Colombia exported 1.30 TWh to Ecuador, a 62.2% increase on the year before, and it exported 244 GWh to Venezuela. The estimated value of electricity exports in 2011 was $92.2 million, which was a 25% increase on the $73.8 million in 2010. “There’s also been a project that’s been going on for five years to export energy to Panama. The regulatory and legal framework has been settled and the only remaining problem is financing,” Juan Jorge Celis Neira explained how new export destinations are awaiting financial backing to get underway. The state-owned transmission firm has undertaken the task of interconnecting Panama to Colombia; this is with an eye to accessing the whole of Central America in the future. Colombia’s electricity sector is likely to lie in the interconnection of the Latin America continent. Studies have suggested that the countries hydroelectric resources have the potential to add a further 40 GW to its capacity, which would far exceed any domestic demand.

The whole continent is looking for interconnection when it comes to the electricity market. As this becomes a reality new markets will open for Colombian companies. Experts say that the country so far only exploiting around 10% of its current hydroelectric power, and with vast quantities of oil and gas, it should have no problem keeping the domestic market switched on with an eye to the whole continent.