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Interview With Colombia’s Minister of Mines and Energy, Irene Vélez Torres – Colombia Energy Summit

Interview With Colombia's Minister of Mines and Energy, Irene Vélez Torres
The Energy Circle (IN-VR)

Felipe Gaitán, The Energy Circle

EnergiesNet.com 02 14 2023

The following article covers an interview conducted with Irene Vélez Torres, Minister of Mines and Energy of Colombia, on the country’s strategy to reach a Just Energy Transition, Colombia’s hydrogen and offshore wind roadmaps, key solar and wind projects, and plans to electrify non-interconnected areas throughout the country.

What is the government’s current plan with regard to the Just Energy Transition, and what are the key steps to be taken in the next 4 years of government?

One of our commitments as a government is to gradually overcome dependence on coal and hydrocarbon-based markets through a just energy transition. In countries like Colombia, whose economies depend largely on the export of fossil resources, in addition to focusing on changes in energy generation technologies so that our national energy matrix is increasingly cleaner, it is also about promoting other economies at national and local levels. As we saw recently at the World Economic Forum in Davos, commitments on climate targets have not changed, but have been ratified. The reduction of investments in coal and hydrocarbons is a reality due to global decarbonisation targets. The challenge, then, is to ensure that the transition in energy generation and consumption transcends into other social, ecological and productive transitions.

The Ministry has established a route to advance citizen dialogues, in which we will agree on the goals, the necessary resources, the regulatory enablers and the timeline to achieve these changes that the country requires, both for the environmental commitments and for the economic matrix that we must replace.

This is a six-month dialogue, of which we are already two months into it. The idea is that, at the end of the six months, we will have more clarity on the scenarios in which the country finds itself. This is important because a just energy transition that is well done, as well as being technical, is one that is planned and built in a concerted manner. Knowing international experiences, we know that energy transitions that work well are those that emerge from a social and political consensus. This is what we are developing at the moment.

What is the Ministry’s specific vision for green development across the country?

We find ourselves in a global context that demands concrete actions for life and for the planet. This planning process that we are carrying out will allow us to establish realistic implementation trajectories that are adjusted to the Colombian context. We seek the gradual replacement of fossil energy sources (coal, oil and gas) with renewable energy sources, such as solar, wind, bioenergy, geothermal, hydro and the production of other energy sources, such as green hydrogen and advanced biofuels. As we said, it is a matter of developing our clean energy potential into a new wealth so that Colombia can adapt in a timely manner to the decarbonised global economy and, through reindustrialisation, become a world power for life.

What is the present status of the Hydrogen Roadmap, and where is the country currently in terms of pilot programmes and future projects?

The process of building the Roadmap for a Just Energy Transition in Colombia includes the development of the hydrogen economy as a support to contribute to the stabilisation of the new energy matrix with variable renewable sources, to the decarbonisation of several industrial sectors and to the production of “green” inputs and chemicals.

The national government has identified green ammonia as an important opportunity for the deployment of the hydrogen economy in Colombia. The idea is to achieve a linkage with the production of fertilisers that contribute to food security and improved productivity in the country’s agricultural sector. In this sense, we are working to comply with the Hydrogen Roadmap, which would allow us to achieve the goals set for 2030.

In terms of hydrogen regulation and legislation, Colombia has a legal framework that facilitates the development of projects and encourages local and foreign investment. In addition, a draft decree is underway to promote the technological implementation of carbon capture, utilisation and storage (CCUS) initiatives in the mining and energy sector.

Progress is also being made in the development of a regulatory instrument called “sandbox”, which will allow entrepreneurs to explore innovative business models in this type of regulated industries. With Icontec, the first phase of the national standardisation project in the hydrogen sector is underway, which aims to adopt 29 international technical standards for production, transport, storage, distribution through refueling stations and use in vehicles. This project involves the different actors in the hydrogen value chain, which already have representative associations.

Recently, the Ministry of Commerce, Industry and Tourism, the Ministry of Mines and Energy, Ecopetrol, Grupo de Energía de Bogotá and Promigas signed a Memorandum of Understanding (MoU) where, among other commitments, they agreed to work together to strengthen scientific exchange to mitigate technical barriers concerning the ambitious and orderly energy transition, and to advance international actions with strategic partners, aimed at boosting reindustrialisation based on renewable energies and the development of the “green” hydrogen sector. In this development, we see Ecopetrol as an important player that, as a state-owned company, will be able to pioneer these developments in Colombia and internationally.

This effort will require the search for other countries committed to technology and knowledge transfer, as well as investors focused on developing a sustainable industry and interested in long-term financing of energy transition processes.

What is the Offshore Wind Roadmap for Colombia, and what benefits does it expect to bring to the country?

Offshore wind energy is a new technology in the country, for which we have an estimated potential of 50GW, which is almost three times the current installed capacity. In that sense, this technology opens up a great opportunity to diversify the generation matrix with a renewable resource that is more stable than the onshore resource. Moreover, we see that with this potential we can become great generators of green energy for Latin America and the entire continent.

The Ministry of Mines and Energy and the Colombian Maritime Authority (DIMAR) issued a resolution to establish the regulatory framework that allows interested parties to carry out feasibility studies for the projects and, eventually, to advance their construction and operation in order to have this new technology in the long term.

The aim of this portfolio is that in the future Colombia will have a developed and attractive offshore wind energy market, which will attract new investors and thus encourage competition and efficiency in the electricity sector. In addition, the aim is for these investors to partner with local companies to build capacity at the national level and for the offshore wind industry to help leverage a greater supply of opportunities for people in coastal areas.

In the short term, what follows is the execution of the first allocation process for temporary occupancy permits for offshore wind energy projects, which will be announced and published by the Ministry in due course for the knowledge of all interested parties.

What are the most noteworthy solar and wind projects in Colombia, and which companies are involved in them?

Generation projects from non-conventional renewable energy sources cover different scales. We define “noteworthy projects” as those larger than 20MW that are part of the centralised dispatch of the electricity market. In this regard, Enel’s 70MW El Paso project is currently undergoing testing, and Enel’s 150MW La Loma project is nearing completion

In the medium and long term, there are more than 100 non-conventional renewable energy generation projects with a capacity of more than 20MW and with a connection concept approved by UPME. More than 20 of these projects will have an installed capacity of more than 200MW. We highlight the 5 main ones:

Sahagún solar park, 400 MW;

Guayepo solar park (phases 1 and 2), 400 MW;

Chinú solar farm, 350 MW;

Beta wind farm, 280 MW; and

Turpiales solar farm, 278 MW.

Among the companies with the largest capacity to be installed, the following stand out: Enel Green Power, Celsia, EDPR and AES. It should be borne in mind that the names of the promoters registered with the UPME do not necessarily coincide with the companies that finally develop the projects, so the list of companies with the largest capacity to be installed and projects larger than 20MW may present variations.

What plans does the national government have to continue electrifying non-interconnected areas across the country?

The electrification of non-interconnected areas is one of the main tasks of the government, as one of the pillars of the just energy transition. Achieving universal coverage in Colombia is estimated to cost more than 12 billion pesos (USD $2.5 billion). Faced with such a challenge, we cannot depend exclusively on public resources, much less on those we have in the national budget. The coverage strategy is comprehensive, involving different actors, entities and organisations.

In this sense, we will continue to make use of the resources of the FAZNI fund, earmarked for this purpose, and specific resources will be allocated from the General Budget of the Nation, we will support the processes of structuring projects of the General System of Royalties, and we will continue to seek support from international cooperation. We seek the development of coverage projects that not only bring electricity to the territories for the first time, but at the same time promote the development of productive projects that leverage territorial development.

In addition, we are promoting the channelling of resources through the mechanism of works for taxes and we are working on the structuring of an auction strategy that will allow us to extend electricity coverage to isolated areas of the country through private investment. All of the above, always working with and for the community.

energycircle.org 02 17 2023

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