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Economy Keys Facts

Colombian sector opportunities

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Colombia Inside Out 2021

Colombian sector opportunities

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ENERGY

April 7, 2021
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ENERGY
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REASONS TO INVEST IN ENERGY

 

  • Colombia is a leader in the energy transition in Latin America. During the last two years, the installed capacity of non-conventional renewable energies has increased sevenfold. By 2022, there will be close to 2,400 MW of installed capacity in different renewable energies.
  • Colombia is positioned in the Energy Transition Index 2020 of the World Economic Forum as the second economy in South America, after Uruguay, measuring a more inclusive, sustainable, affordable and secure global energy system.
  • Colombia´s government has established a modern regulatory, institutional and market scheme that seeks to diversify the energy matrix, expanding 50 tomes the installed capacity in alternative sources from 50 MW in 2018 to 2500 MW by 2022.
  • According to the Energy Plan 2050, published by the UPME, the participation of unconventional energies is projected to reach 25% of the energy matrix.
  • The development of renewable energies in Colombia has incentives such as the deduction of 50% of the income tax for 15 years for investments in alternative sources; the sale of NCRE energy by the generator is considered exempt from income tax; exclusion of Tariff and VAT for the importation of equipment for the development of generation projects; the automatic exclusion of VAT in the acquisition of solar panels and equipment for solar generation.
  • Colombia has signi‑cant potential in the sector, with power generation from non-conventional renewable sources, due to the availability of energy resources such as Solar (average daily radiation 4.5 kWh / m2 higher than the world average of 3.9 kWh / m2), wind park (potential for the implementation of wind plants of more than 25GW) and biomass (potential to supply 46% of the national energy demand – more than 500,000 TJ per year).
  • The National Interconnected System connects 48% of the national territory and covers 97% of the population. The non-interconnected areas represent the remaining 52%, a total of 17 departments, 1,441 municipalities and 625 thousand people. Currently, these areas produce energy with Diesel. There are investment opportunities for foreign investors interested in providing clean energy solutions in these areas of the country.
  • Colombia was designated by the UN as Global Champion to lead the thematic axis of the energy transition in the framework of the High-Level Dialogue on Energy that will be part of the United Nations General Assembly in September 2021.
  • It is expected that during the ‑rst quarter of 2021 the bill will be published to encourage the development of green and blue Hydrogen projects. In December 2020, the Colombian government joined forces with the Chilean government for the incorporation of hydrogen. In addition, the UPME and the Ministry of Sciences are carrying out a study to evaluate the impact of hydrogen and its contribution to reducing CO2 emissions by 2050.
  • The government, with the support of the World Bank, hopes to have a roadmap to encourage the development of offshore wind projects in the country. It is clear to the government that the greatest potential of these projects is in the shallow waters of the Caribbean Sea. La Guajira and Magdalena being the most attractive departments for its development.
  • Through the transmission calls, it is sought to continue expanding the transmission infrastructure in the country. By 2021, 17 projects are planned to be launched, with estimated investments to USD 340 million. Currently, there are 3 calls of‑cially open, and it is expected that they will be awarded during April and May of this year.
  • These 3 calls correspond to the Battery Energy Storage System in the Atlantic, the ‑rst large-scale BESS public call in LATAM, and to the two new 230 kV electrical substations that will be in the departments of Antioquia and Valle del Cauca.