Colombia's Renewable Energy Industry

Colombia committed to the Energy Transition process with the election of President Duque in 2018. His administration set a goal to increase unconventional renewable energy generation from 1 percent to more than 12 percent in the energy matrix by 2022, and raise the reduction of emissions of greenhouse gases (GHG) from 20 percent to 51 percent by 2030.

The National Development Plan introduced incentives and specific measures to promote non-conventional renewable energy and energy efficiency. The three most important incentives were: 1) extend the period, from 5 to 15 years, to use 50 percent of investments in generation equipment for non-conventional renewable energy and energy efficiency for deductions for income tax; 2) VAT exclusion on the purchase of solar panels, inverters and charge controllers; and 3) 10 percent of the energy sold to end users by the distributor should come from non-conventional renewable sources.

Colombia implemented a renewable energy auction in 2019. Contracts were awarded for nine wind and five solar projects, worth approximately $8 billion through Colombia’s Mining and Energy Planning Unit (UPME). The developers will sign a 15-year power purchase agreement (PPA) for 1,365 MW of wind and solar capacity due to be commissioned by 2022. The projects will contribute to the country’s aim to generate 2.5GW of solar, wind and biomass energy by 2022.  The government announced in February 2021 that by the end of this first semester, a third auction of alternative energy will be called, in which they are contemplating the generation of up to 5,800 MW that could come into operation in early 2023.

In transmission infrastructure, Colombia opened in January 2021 the first auction for large scale battery energy storage systems for the Department of Atlantico. The objective of the project is to operate under contingency conditions of the department’s regional transmission system. Colombia is also positioning itself to be a leader in sustainable mobility for the next decade. The country approved the first program for 20 percent biodiesel blends. 

After the approval of Law 1715 in 2014, the government maintained its efforts to promote private ventures in large scale, renewable energy projects. The country is developing the regulatory framework to promote new technologies such as geothermal, hydrogen and offshore wind. 

The U.S. International Trade Administration’s Global Team for Renewable Energy is organizing a Colombia focused information session on July 28, 2021. U.S. renewable energy companies interested in the Colombian market should contact Norcia Ward Norcia.WardMarin@trade.gov in the Commercial section of U.S. Embassy Bogota for more information.