The Business Year

Álvaro Torres

COLOMBIA - Green Economy

Álvaro Torres

CEO, Electryon Power Inc.

Bio

Álvaro Torres has 30-plus years of experience in the areas of engineering, project development, and construction, as well as in academic work as a full professor at the University of Los Andes. He holds a PhD and a master’s degree in electrical power engineering, as well as a master’s of science in systems and computer engineering. Prior to joining Electryon Power Inc., Torres was co-founder & CEO of Consultoria Colombiana S.A., country manager in Colombia for SNC Lavalin, vice president of investments at GEB, and country manager in Colombia for Northland Power Inc.

Electryon is striving to become a leading developer in the renewable energy sector in Latin America.

Can you give us a general overview of Electryon and its operations in the region?

Electryon is a project developer at its core: We originate our own projects and apply our development expertise to bring them from “greenfield” to what we call the “ready-to-build” phase. Once we reach that phase, we usually hand our projects over to local and/or international investors interested in continuing with their construction and long-term operation. The scope of our development activities include: (i) securing the interconnection of our projects to the power system, (ii) carrying out the environmental and technical feasibility studies, (iii) obtaining the environmental licenses, (iv) negotiating the long-term lease agreements with landowners, and (v) carrying out engineering designs, among others. Upon completion of these activities our projects reach “ready-to-build” and construction can begin; construction of these type of projects takes between 1 and 2 years. Electryon can participate with additional equity in the construction stage to bring the projects to commercial operation date; however, typically our investors are large local/international utilities that may not be interested in having equity partners. 

What projects is Electryon focusing on at the moment?

We are in the field of PV solar and wind power generation projects and the production of green hydrogen/ammonia. Currently, we have a portfolio of 520MW of PV solar power projects that will reach the ready-to-build phase either at the end of 2022 or Q12023. Our green hydrogen/ammonia production project is based on a 500MW wind project currently in the feasibility stage, and we expect to reach “ready to build” in 2025-2026.

What investment opportunity did Electryon identify in renewables, and what is the potential of the industry?

Colombia wants to move toward renewables because there is no more room for large hydropower plants. The only way to expand the system is through renewables. The Ministry of Energy has a strategy to develop 10% of the total installed grid capacity through renewables; however, our field is larger than that because we are not only thinking about using renewables for electricity but also using renewables to produce green hydrogen for the national and international markets.

How do you envision the role of renewables in the energy matrix development?

Compared to fossil fuels, renewables are extremely competitive. The main difficulty in Colombia is our reliance on hydropower, which could also be seen as renewable: 80% of the energy generation in Colombia comes from hydropower generation. Generating energy with hydropower is cheap, except when El Niño occurs. In that case, we must use thermal power plants, making the cost of electricity increase drastically in Colombia. Therefore, the combination that the government is looking into with our participation is using renewable energy sources instead of building more thermal and large hydropower plants. Renewables can supply this complementarity, which means that between hydropower, solar power, and wind power, we can have more green energy in the country.

What makes Colombia special as an investment destination in matters of renewable energy?

Colombia has extremely rich resources: We have wind, unfortunately only in the northern part of the country, though we also receive a great amount of sun all over the country due to our Equatorian location. We are also strategically located for the exportation of green hydrogen/ammonia in comparison with other countries in Latin America and the world. One of our main competitors for the production and exportation of green hydrogen/ammonia is Chile, but they are farther away from all the potential international markets than Colombia (US and Europe). The main challenges in terms of renewable energy are regulations. The government has been improving the regulations by making changes, and this has caused significant disruption in the market; however, this will also improve the competitiveness of the market because we need solid competitors—good companies coming to the market—and the regulations are working in that sense. 

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