Photo: Hidroituango Dam, EPM via Caracol Radio
An energy crisis is brewing in Colombia, as in much of the world. Though the government and foreign investors have joined the renewable energy frenzy, they must act quickly to lead the country through an energy transition effort that outlives the current administration.
President Iván Duque showcased ambitious environmental goals at COP26 earlier this month in Glasgow, Scotland. Among them, he pledged to reduce greenhouse gas emissions by 51 percent by 2030, achieve carbon neutrality by 2050, reach zero deforestation by 2030, plant 180 million trees by August 2022, and empower local communities to protect their territories.
Critics contend that Duque has been unable to make headway in three years as president and that his efforts come too little, too late. Drug trafficking organizations have filled power vacuums left by the FARC rebel group. Social leaders, environmental defenders, and Indigenous communities are being displaced, killed, and threatened in record numbers. And Duque’s campaigns to curb deforestation are too focused on fighting the lower echelons of criminal organizations instead of the financiers and cattle ranchers behind the operations.
Despite these concerns, there is one item in the government’s environmental agenda that deserves praise and that subsequent governments should continue: energy transition.
Colombia’s energy matrix is relatively clean: the government aims to increase the installed capacity for the generation of renewable energy, going from less than 50 MW in 2018 to 2,500 MW in 2022, and as a result, expects a reduction of 9 million tons of CO2. However, while the country has a clean domestic grid, Colombia remains too dependent on hydrocarbon exports. Crude oil, coal briquettes, refined petroleum, and coke comprise 32 percent of the country’s total exports, according to DANE, and a vital component of government revenues. The government has put forth a long-term energy transition program to make the country’s energy grid cleaner, promote green jobs, attract foreign direct investment, and become a renewable energy powerhouse.
These transformations don’t come without risks. Colombia is heavily reliant on hydropower to keep the lights on. Between 70 and 80 percent of the country’s energy comes from 30 hydroelectric dams throughout the country. Such a huge dependence on only one source of energy means that the country’s energy security is especially vulnerable to climate-change-related events, including droughts. Moreover, delays in Hidroituango, one of the most important hydroelectric projects in the Antioquia department, which was supposed to start working in 2018 and supply 17 percent of the country’s energy, is also adding pressure for the country to diversify its energy grid. Additionally, gas, Colombia’s second most important source of energy, is running low as there are an estimated 7.7 years of reserves left, risking medium-term energy supply. Finally, as energy demand increases, these two factors suggest that unless Colombia diversifies energy sources towards solar, wind, and hydrogen, the country is likely to struggle with energy supply to meet medium-term demand.
Colombia has huge potential in terms of solar and wind energy. The country has a solar energy potential of 6 KW/h (m²/d), which is higher than the world average of 3.7 KW/h (m²/d). Despite this, only 0.19 percent of the country’s domestic energy comes from solar sources. Regions such as La Guajira, Cesar, and Santander have an estimated potential of up to 1,700 KWh of photovoltaic generation per year. In terms of wind, the Caribbean coast, particularly the Department of La Guajira, is recognized worldwide for the speed of its winds, which range from 8.50 meters per second (m/s) to 9.75 m/s on average and have even reached speeds of 14 m/s, one of the world’s highest recorded wind speeds and almost twice the average global wind speed. Colombia’s potential in terms of wind energy is comparable to powerhouses such as Spain and the Netherlands. Despite this, some of the wind farm and high-voltage transmission line projects are being held up by prior consultation processes with Indigenous communities. This could potentially delay 65 wind farms holding 2,600 wind turbines (close to 10 percent of the country’s energy demand by 2031), as well as the 470 kilometers of high voltage lines. Hydrogen also holds enormous prospects as an abundant source of renewable and non-renewable energy to diversify Colombia’s grid. The government recently released a roadmap to take advantage of coal, gas, and water to produce blue, green, and gray hydrogen production.
However, uptake for renewable energy among industry players is still limited. The government could provide additional incentives for businesses to build renewable power plants or source their energy from them. The mining sector is likely to play an important role in this strategy for two key reasons. First, lowering emissions and carbon footprints is a key component of mining sustainability, which firms can skillfully use to attract investment and improve relations with local communities. Companies that provide surplus energy to local grids and leave behind installed renewable energy capacity following mining closures will benefit in terms of public relations. Second, producing renewable energy can represent income for mining companies in the form of tax breaks or other deductions. Additionally, selling renewable energy back to the grid is likely to represent an additional, albeit modest, source of income for mining companies. Even though the government has incentives for the development of non-conventional energy sources, the incentives for developing solar and wind energy are the same for small hydroelectric power plants. Providing different incentives to renewable energies is likely to promote the uptake of solar, wind, and hydrogen to make Colombia less dependent on hydroelectricity.
The bottom line is that much like the rest of the world, Colombia could face an energy crisis if its government and firms do not act quickly to diversity its energy grid. Unless Colombia’s Hidroituango dam comes online next year and the prior consultation processes for wind energy in La Guajira is resolved soon, Colombia’s transition will be stalled. Colombia has the potential to become a renewable energy powerhouse, but only if its sustainable energy policy is resilient to political turnover. The energy transition is the one item in the government’s agenda that does not seem to be contentious with political adversaries such as left-wing Gustavo Petro, or centrists Alejandro Gaviria and Sergio Fajardo. President Duque has laid the groundwork, created enthusiasm among foreign investors, and created expectations before the international community for Colombia to follow through on the government’s promises.
This article is part of a longer report on Renewable Energy published by Colombia Risk Analysis.
Sergio Guzmán is the Director of Colombia Risk Analysis, a political risk consulting firm based in Bogotá. Follow him on Twitter @SergioGuzmanE and @ColombiaRisk.
Sandra Velandia is a Research Intern at Colombia Risk Analysis and a current undergraduate at Universidad del Rosario. Follow her on Twitter @sandravelandiaa
