AES, EDPR, Trina Solar and Colombian power group Celsia were the winners of 1.3GW of new wind and solar PV capacity in the country’s debut clean energy tender, which will quickly usher the Latin American country into the renewables era.
While EDPR was the biggest winner in wind with two projects adding up to 492MW, China’s Trina Solar consolidated its position in Latin America by winning all the PV contracts, which add up to 288MW.
“From under 0.5% we will have 12% of new renewable and clean power capacity by 2022 … I am very optimistic and expect to have more than that,” said energy minister Maria Fernanda Suárez during a press conference in the country’s capital, Bogota.
She said the tender was oversubscribed with an initial tally of 4.7GW lining up for bidding, of which 2.98GW put down guarantees and participated. That means about 27% of the tender ready capacity in the country was contracted.
Together with wind and solar projects contracted in the peak time capacity tender in February, Colombia will by 2022 have 2.2GW of new wind and solar capacity built, up from 60MW today, which includes the 20MW Jepírachi, the country’s sole wind farm in a total 17GW power generation capacity.
During the the press conference, Suárez pointed out that renewables came in at a historic low price for power in Colombia, at around 95,000 Colombian pesos (COP) per MWh or $28/MWh. This is down to about a half from the cap price set of 200,000 COP/MWh
With short contracts averaging two to three years, prices in Colombia vary significantly, especially as the country’s 70% hydro power supply has been severely affected droughts caused by El Niño. In 2015 to 2106, the country’s last severe power crises, power prices tripled and helped the government start preparing to contract renewables.
Now, with long-term PPAs of 15-years, Colombia’s first, Suárez expects the power market in the country to start changing.
“This will generate deep changes in the markets and on how power is purchased and the first step was taken in the regulated market,” she says.
The details published the day after the tender gave an insight in the reason behind the low prices, which analysts expected to come in around $50/MWh, given the hurdles of a new power market.
Of the six wind power projects contracted, four had already won contracts in the peak capacity tender and needed long-term contract to make them bankable.
AES Corp, though its local subsidiary AEO Chivor, won PPAs for the 180MW Casa Electrica wind farm, which the group acquired when it bought Jemeiwaa Ka’I, a wind developer. Casa Electrica is one five wind projects developed which total 594MW portfolio.
EDP Renováveis won 15-year PPAs for 212MW and 280MW wind projects which will be built by 2022. The company celebrated the debut of renewables in a market with “growing power demand and solid wind resources”.
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“Colombia will the base for consolidation of EPR in Latin America, where the company plants to grow [through] development of projects, both wind and solar PV,” the company said in a statement.
Celsia owns the other two wind projects through its Empresa de Energia del Pacifico: the 250MW Camelia and the 80MW Acacia 2 wind farm.
EDPR and Celsia bought their projects from Portuguese developer Renovatio, which had won contracts for the same projects in the peak time tender in February. All the wind projects were located in the Caribbean peninsula of La Guajira where most of Colombia’s 20GW wind potential is located.
The PPAs are expected to be formally signed in about 20 days.