Colombian Government publishes documents for the first tender of renewable energies in the long term
On January 4, the UPME published the terms and conditions of the tender for long-term electrical supply interested parties may submit comments to those sheets until January 18 and submit the pre-qualification documentation on January 28. The process seeks to contract 1.183 GWh annually, under the modality of average energy, through contracts valid for 12 years and must start delivery of energy on 1 December 2012.
The fact is of vital importance since it marks an important milestone in the sector, with the creation of a mechanism of expansion different from the charge of reliability. The latter has proven to be costly to end users, as it requires a series of payments without the energy bill. Although its function is to ensure that the necessary energy is available at all times, it has been used as an expansion mechanism of the generator park.
Only generation projects registered with the minimum UPME in Phase 2, that is, in the process of feasibility: environmental license and connection to the SIN, will be able to participate. According to the report of January 11, 2019, the major projects to 10MW that will be able to participate are 104 projects: 25 Thermal, 45 solars, 20 hydro, 13 wind, and 1 with biomass. In addition, projects in operation with the date of start after December 31, 2017, may be involved.
The total available capacity would be 11, 3GW of which only 0.4 GW are in Stage 3. Compared to 135 MW or 270 MW required to supply the aforementioned amount of energy according to the hours of availability of the plant. At this point, we see that the Ministry of Mines was either short or very conservative.
In the next few days the CREG must publish the definitive resolutions of: transfer to Formula Tariff, conditions of competition of the scheme.
The auction is two-pronged, i.e. requires voluntary participation of the demand (marketers to the final customer) and supply (generators). And in this regard, we are concerned that there are no incentives for demand to participate in this auction.
The qualification criteria include: 1. Resilience, understood as diversity 2. Complementarity of resources in front of the Cauca-Magdalena basin, 3. Regional energy security 4. Emission reduction.
In our opinion, the main difficulty of these sheets lies in the guarantees demanded, which are not few, nor economic and transfer to the developer a very high risk that can not handle. Therefore, the main limitation for multiple bidders will be presented at this auction.
We therefore consider it urgent that a code of ethics be implemented for the sector, as is the case in the world’s big markets. So that those entities that develop dubious or anti-ethical practices, are strongly punished in the suspension or elimination of the license, the company and its shareholders.
Finally, we feel the absence of the cost-reduction mechanisms that the reduction of carbon credits should offer. That for auctions in other countries, was the key factor for obtaining very low prices. Also, we miss the incentive to the national industry as a factor of qualification of the different offers.
In Efinetico, we can accompany the process of participation of your company in this auction.Contact us
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