Colombia shared energy storage policy study

How does Colombia ensure security of electricity supply?

The main mechanism to ensure security of electricity supply is Colombia’s reliability charge, which has also seen increasing participation from renewable energy capacity since 2019. The scarcity pricing formula was reformed in 2015/16 and today reflects the cost of the oldest diesel generator.

Does Colombia have a long-term energy strategy?

Under Colombia’s long-term strategy (E2050), oil continues to play a role for exports but declines strongly in the domestic energy system. By 2050, the country targets an increase in electrification of final energy consumption of 40-70% of final energy use, multiplying by seven the electricity consumption in 2015.

Are gas security policies becoming a major priority for Colombia?

Gas security policies are becoming a major priority for Colombia. Notes: Demand is calculated based on the energy balance. Source: IEA (2023). IEA. CC BY 4.0. Power generation in Colombia is dominated by hydro but backed up with gas-fired and coal-fired power generation.

Could Colombia benefit from a normative energy system?

Colombia could benefit from the development of a normative energy system scenario that is consistent with the legislated goal of net zero emissions by 2050, set out in the Climate Action Law (2169/2021).

Why is natural gas important for energy security in Colombia?

IEA. CC BY 4.0. Power generation in Colombia is dominated by hydro but backed up with gas-fired and coal-fired power generation. Natural gas flexibility is critical for energy security in Colombia, mainly due to its role in supporting electricity supply but also strong industry demand.

How does Colombia operate a reliability charge?

Colombia operates a reliability charge based on four elements. The first is a call option for firm energy contribution, activated when the spot price exceeds a monthly scarcity price set by the regulator. The call option allows load to hedge price spikes and the system operator to identify hours of tight supply.