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Hidroituango: Is it time for an energy transition in Colombia?

The electric matrix is fundamentally water-based with close to 80% of the total installed capacity, while the remaining are coal, gas, and liquid (oil based) thermal power plants. Although this composition greatly is renewable energy (water) it also has a large part of liquid components (diesel) which are highly contaminating and more expensive than any other conventional or non-conventional energy source such as wind or solar.

The question is if the current electrical matrix is sustainable and what is the relationship between climate change and the international commitments of the country (COP21) and lowering greenhouse effect gas emissions (GEG).

CO2 emissions are low compared to other sectors of the economy such as agriculture and transportation. Except for ethanol production from reservoirs, they do not emit GEG. Thermal power plants produce emissions and due to sector plans, they produce energy only when there are drought conditions, such as the El Niño phenomenon which occurs every 4 to 5 years.

However using liquids for power generation, besides being contaminating is very expensive and is not understandable in a country which has abundant more economic and clean resources (small water power plants, biomass, wind, solar, and geothermal).

On the other hand, one of the effects of climate change is the effects on the rain regime creating uncertainness in power plant power generation, reducing the reliance on the system and raises the price of energy.

And adding to that are the strong regional environmental and socioeconomic impacts of hydroelectric projects such as the recent tragedy of Hidroituango. Therefore, it may be concluded that the composition of power generation as a whole is not sustainable and therefore must change.

A shift towards renewable and non-conventional sources 

Making this shift means changing power plants that use diesel and natural gas for other methods that use non-conventional renewable energy sources. This should be the first step toward energy transition in the energy sector.

But the possibility of renewable sources to effectively penetrate and be an important complement to energy generation is subject to several circumstances. On one hand, regulations which will allow long-term wind or solar contract funding. The government took the first step with Decree 570 of 2018, which proposes developing bids for long-term contracts, which need to be regulated by the Colombian Energy and Gas Regulation Commission (CREG, for its Spanish acronym).

The forthcoming change in administration is not very favorable to provide compliance with this decree, which had great opposition from industry associations which group the power generation companies in Colombia. It looks like there is a great fear of new players in the market which could take a piece of the energy pie.

It would be desirable that the bidding could be directed towards NCRE (Non-Conventional Renewable Energy) and that a portion of the demand to be compulsory, even if it was small. It is a way to begin a learning process and allow entry of new companies to the sector.

On the other hand, energy transition should contemplate changing the automotive market towards electric power. This is a lengthy process and requires drastic measures from the government to implement it as fast as possible. In case this occurs, electricity demand would increase which should be tended by NCRE.

The government has proposed objectives of electric motor vehicles based on tax incentives which are a very low percentage of the current vehicle market of about 13 million motor vehicles, including motorcycles. Just about 40,000 vehicles could get tax cuts up to the year 2030.

There needs to be an electric mobility policy to suggest objectives, define incentives and reduce the entry of more fossil fuel vehicles into the market. They also need to regulate income and technical aspects of vehicle electric energy providing stations.

Another essential element is power transitioning, which is allowing consumers, through communitarian or individual efforts to produce their own clean power and sell their surpluses to the producers at reasonable prices. In this sense, the CREG issued resolution 030 of 2018 defining the mechanisms for selling surpluses to producers and small-scale independent producers. However, the sale conditions, especially for projects above 100 kW, are not very favorable.

The progress achieved up to now are scarce but are in the right direction but there is still much to do in other aspects, besides the regulatory realm.

Energy efficiency and changes to energy consumption habits, for instance, are basic topics which require a change in energy use models and which will require more time for the country to definitely achieve.

The abovementioned elements pose very important challenges for future administrations. But above all, they need to change how the sector is perceived to perform changes in the power policy which will allow the country to reach long-term sustainibility goals and which in reality contribute to diminish emissions and mitigate climate change.

It is not about complementary or alternative measures but a deep cultural change which implies clear policies and direct community participation.

 

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