Colombia PV to take off as peace draws closer

8 October 2015 by Jason Deign, Solarplaza

Conditions are almost perfect for PV to help improve Colombian competitiveness. All that is missing is one piece of legislation.

Solar could play a significant role in helping peacetime Colombia match rivals such as Chile, Panama and Peru in competitiveness, Solarplaza has learned. A landmark peace agreement with FARC guerrillas is expected by March 2016 at the latest. 

After then, “the role that renewables could play to boost economic activity in historically neglected areas will be fundamental,” said John Padilla, managing director of IPD Latin America.

Colombia’s historic peace process, once complete, will require extensive rural electrification and job creation programmes, both of which can be achieved with solar power. “The government is currently preparing post-conflict strategies and should be seriously considering the role renewable energies could play in peacetime, with the assistance of multilateral and bilateral lending institutions.”

At present all that is missing for the market to take off is the announcement of financial incentives attached to Law 1715, which was approved in 2014. The announcement was due in May this year but “the impact of the downturn in global commodity prices and the resulting slowing economy has placed increased strain and scrutiny on incentives of any sort,” Padilla said.

Dr. Arnoldus Mateo van den Hurk, of Renewables4Mining, which has acted as a consultant on the law, said approval of the incentives could provide a range of benefits for the country. 

For example, electricity costs in the north of Colombia, which is home to eight of the nation’s 10 largest industrial giants, could easily be reduced through a mix of solar and biomass, since there are plentiful resources of both. 

Another significant benefit is that solar power could help reduce the impact of La Niña, the cyclic weather phenomenon that disrupts rains, depletes hydro reserves and has already led to record spot prices for energy in Colombia.

The good news is most observers agree that the Colombian government cannot afford to drag its feet much longer in finalising Law 1715 once the all-consuming peace process is complete. According to Padilla, who will be speaking at the Solar PV Trade Mission Central America & Colombia 2015:

“We expect that all pending regulation related to the renewables law will be largely completed during Q1, 2016. This demands that the incentives decree is executed first, and done by the end of the year for the rest to be completed on the time frame suggested.”

What nobody doubts is that Colombia is serious about its renewable energy plans. In September the country became the first South American nation to submit an intended nationally determined contribution to the United Nations Framework Convention on Climate Change. And over the next 15 years, Colombia’s Mining Energy Planning Unit (Unidad de Planeación Minero Energética) is forecasting a spend of $554 million on renewables, which - given the country’s solar, wind and biomass potential - could expand the installed renewable energy capacity to 3,622 MW by 2030 from the current 420 MW.

“This could prove highly conservative, depending more than anything on political will,” Padilla said. “And that does not include the electrification of off-grid areas, where the government continues to make significant efforts to increase coverage and reliability.”

  • Get the inside track on the Colombian solar market at the Solar PV Trade Mission Central America & Colombia 2015, which runs from November 16 to 20 in Panama City, Panama, and Bogotá, Colombia. Book your place now.