Colombia Is Betting Big On Wind And Solar
For Colombia, 2021 is starting with the promise of a boom in renewable energy generation. On January 14th, the Ministry of Finance announced the offering of its first green bonds next July, aimed at funding environmental projects, notably renewable energy plants. A new round of auction allocating 5 GW of wind and solar capacity for long-term PPAs is also slated for 2021. And although renewable energy sources (excluding hydropower) currently represent only 1% of the country’s electricity mix, Ivan Duque's government is determined to make them the next energy frontier for the country.
Fossil fuels and hydropower have historically been the cornerstones of the Colombian energy landscape. Yet, several trends suggest that it might be time for a change. The oil sector has been a key driver for the Colombian economy, with a share amounting to over 40% in the primary energy supply. However, due to rampant corruption and civil unrest with the FARC, the security of Colombian energy infrastructures became harder to guarantee. This was a problem in a country where international investment had already fallen due to the drop in oil prices in 2014 and again in 2020. In addition, the depletion of oil resources is threatening the future of the whole Colombian petroleum industry: in 2019, the proven reserves were estimated at 2 billion barrels, which was equivalent to only 18 more years of exploitation (excluding exports).