Header InsideOut


Colombian sector opportunities

Header InsideOut


Colombian sector opportunities



April 5, 2022



1. According to the World Economic Forum, Colombia is the third country in Latin America in the Energy Transition Index 2021, surpassing Brazil and Chile. In the world, we ranked in the 29 position among 115 countries.

2. The Colombian government established a regulatory, institutional and market scheme that aims to diversify the energy matrix. We will increase 100 times the installed capacity in alternative sources from 28 MW in 2018 to 2,800 MW in 2022. By 2023, the installed capacity in renewables will be 4,584.3 MW. According to the Energy Plan 2050 published by the UPME, the non-conventional renewable energies share is projected to reach 25% of the energy matrix in the next couple of years and this will help us to accomplish our climate goals and reach net-zero by 2050.

3. The Colombian electricity sector contains a mixture of public and privately-owned companies. Deregulation in the 1990s opened the sector to private investment and established a wholesale electricity market.

4. A push towards the development of the country's non-hydroelectric power capacity has attracted new investment in wind and solar power projects as well as the transmission infrastructure needed to support their development.

5. Colombia has a well-established mechanism to secure the reliability of the energy system in the long run. The reliability charge scheme ensures energy supply for all users of the country connected to the grid, especially during extreme climatic phenomenon such as El Niño to its privileged geographical position, Colombia has a high potential to develop renewable energy generation projects such as:

  • Sun: Average daily radiation 25% higher than the world average (4.5 KWH / M2). According to the Mining and Energy Planning Unit – UPME, the regions with the greatest potential for solar energy generation are La Guajira, San Andres, Bolivar and Boyaca.
  • Wind: The wind power generation potential for the implementation of wind plants is more than 50GW, among the highest in Latin America, according to the World Bank's Energy Sector.
  • Biomass: According to the Mining and Energy Planning Unit - UPME, the country's energy potential from biomass is enough to supply 46% of national energy demand.
  • Water: More than 740,000 watersheds and a multiannual flow of 52 m3/s. We are in the top 10 countries that concentrate 46% of the water supply. According to the Mining and Energy Planning Unit – UPME, the installed capacity potential is 65 GW.

6. There are more than 181 power generation projects registered in the Mining and Energy Planning Unit – UPME, at phases 2 (Feasibility) and 3 (detail engineering), with an installed capacity of 12.749,93 MW.

  • Solar: 9,130.54 MW, 153 Projects
  • Wind: 3,446.20 MW, 16 Projects
  • Other Technologies: 218.19 MW, 12 Projects (Small Hydropower Plants - SHPs and Biomass)

7. In 2021, The Mining and Energy Planning Unit - UPME launched 7 public calls for transmission works, which are currently in the pre-publication stage, for more than USD 100 million of investment to guarantee the reliability of the system. Additionally, in the 2020-2034 Expansion Plan, 8 works were proposed to strengthen the national electricity system and will be executed via public call or expansions of the current network operators.




The government's clean energy focus includes hydrogen, offshore wind, and battery energy storage systems.

1. Green hydrogen is an alternative for Colombia's energy future. The government launched a 30-year hydrogen roadmap. Before the end of 2030, investments between USD 2.5 billion and USD 5 billion are required for the development of initiatives to meet the supply and demand of hydrogen as a clean fuel and become one of the world's leading exporters.

2. Ecopetrol, Grupo de Energía de Bogotá, Promigas, TGI have announced the development of hydrogen pilots linked to industrial uses, transportation, electricity generation, mixed uses: industry and transportation; and blending with natural gas, possible alliances can be evaluated. Some international firms such as Siemens, Porsche, Daimler, and Engie ratified the commitment for the development of the hydrogen roadmap.

3. In 2022, the first three hydrogen pilot projects will start operations in Colombia that will accelerate hydrogen take-off.

4. By 2030, electrolysis plants with an installed capacity between 1 to 3 GW will be developed, in regions with high renewable resources and close to major consumption cities. 50 kilotons of blue hydrogen will be produced, thanks to the capture of CO2 in existing or new plants with Steam Methane Reforming technology (SMR) and a cost of production of USD 1.7 per kilogram of green hydrogen is expected.




1. With the support of the World Bank and the UK government, the draft version of the roadmap for the development of offshore wind energy was launched. The final version will be ready in the second quarter 2022.

2. Colombia has great potential in northern areas of the country (Atlantico, Magdalena and Guajira regions), it is estimated in 50GW, the wind speeds are greater than 10 m/s in some areas. The expected investments by 2050 will be USD 27 billion.

3. "Low" Scenario: Colombia could have 200 MW of offshore wind power by 2030; 500 MW by 2040; and 1.5 GW by 2050.

4. "High" Scenario: Colombia could have 1 GW of offshore wind power is projected for 2030, 3 GW for 2040 and 9 GW for 2050. But additional transmission upgrades that are currently not under consideration.

5. The Mining-Energy Planning Unit (UPME) launched in 2021 the first public call in Latin America for large-scale batteries Energy Storage System – BESS, with a capacity of 45 MW, which will generate greater reliability in the provision of the service in the Colombian Caribbean. It was awarded in July to the international investor Canadian Solar and will enter in operation in June 2023.




Colombia offers incentives for the development of renewable energies, including a 50% income tax deduction for 15 years for investments in alternative sources. Energy from non-conventional sources sold by the producer is exempt from income tax; energy generation equipment imports are exempt from custom duties and VAT; and the acquisition of solar panels and solar generation equipment is automatically exempt from VAT, among others.