Colombia Renewable Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)
The market is segmented by Type (Hydropower, Bioenergy, and Other Renewables)
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Scope of the report
Key Market Trends
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The renewable energy market in Colombia is expected to grow at a CAGR of more than 2.6% in the forecast period of 2020-2025. Factors such as supportive government policies and efforts to meet the rising power demand using renewable energy sources are expected to be significant contributors to the growth of the market. With the commitment of the government to obtain maximum energy from renewable and to reduce carbon emissions, the share of renewable is expected to grow significantly and are driving the renewable energy market further. On the other hand, factors like unfavourable climatic conditions and the use of other conventional energy sources such as coal and natural gas are a few restraining factors for the Colombia renewable energy market.
Wind energy in Colombia is expected to have significant growth in the market as Colombia is trying to generate more share of its energy needs from renewable sources like wind energy during the forecast period.
Colombia has a great potential for renewable energy sources, the future development of renewable energy sector in Colombia with the growth of energy consumption and substitution of fossil fuels by renewable by utilizing actual renewable energy potential offers important investment opportunities for companies planning to enter the Colombia's renewable energy market.
Scope of the report
The Colombia renewable energy market report includes:
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Key Market Trends
Wind Energy is Expected to have Significant Growth in the Market
La Guajira and other nearby areas have the perfect conditions for investors interested in wind energy production. The La Guajira Peninsula, due to its geographical location, has the potential for wind generation of 18 GW, enough to cover national demand twice. The department of La Guajira stands out for its high natural resources in this area (estimated at 21 GW of capacity).
Winds in La Guajira have been classified as Class 7 (over 10 m/s), making it the region to have high-speed wind. It has been estimated that Colombia has a wind power potential of 21,000 MW in the Guajira region which would be enough to generate enough power to twice meet the Colombian power demand. The Jepirachi wind farm is the first operational wind farm in the country which as commissioned in 2004.
The Unit of Mining and Energetic Planning (UPME) has a goal to increase the contribution of non-conventional renewable energy sources to approximately 10% of the country’s total installed capacity in the coming years. Wind power projects, 18 in total, have secured rights for 2,531 MW which is expected to come by 2022.
Colombia's total wind power installed capacity was 18.42 MW in 2019. In the coming year, the wind power installed capacity is expected to grow gradually with new wind power projects coming up in Colombia to meet their energy needs.
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Rising Renewable Energy Deployment to Drive the market
Colombia has one of the cleanest energy matrices in the world, however, its climatic conditions and geographic positioning, offers the chance to develop solar, wind, bioenergy, and hydro energy projects.
Colombia's primary energy producer is hydro-electricity, with an installed capacity of 11927 MW in 2019. Factors like its privileged geographic location and natural wealth, it also has the potential to become a key player in the development and application of alternative technologies. These technologies will not only solve the country’s energy crisis, but they will also make an important contribution to environmental protection.
Colombia has solar radiation throughout the year, especially in departments such as La Guajira, Atlantico, Antioquia, and Valle de Cauca. The country’s solar installed capacity has reached 89.52 MW in 2019.
Colombia aims to contribute 4 gigawatts of renewable energy toward the 2030 regional goal of 312 gigawatts.
Around 70% of the country’s electricity already comes from hydropower, but Colombia is focused on quickly ramping up the share from solar and wind to 9% by 2022. Colombia has also been awarded contracts for wind and solar projects worth about USD 2.2bn in 2019.
Colombia’s renewable energy auction is expected to increase by 40 times the country’s actual solar and wind energy installed capacity. The auction, carried out in 2019, assigned 10,186 MWh/day of energy contracts at a weighted average price of USD 0.027 kWh (COP USD 95.65 kWh), and approximately 34% lower than the current market prices of bilateral energy contracts. The contracts were awarded to 8 generation projects (5 wind and 3 solar) from 7 companies.
Therefore, With upcoming and under construction renewable energy projects, the renewable energy is expected witnes significant growth during the forecast period.
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The Colombia renewable energy market is moderately consolidated. Some of the major companies include Celsia SAESP, DNV GL AS, Enel Green Power SpA, Ventus Ingeniería S.R.L, and EDP Renovaveis SA.