Ramiro Arellano Price, president of the Association of Renewable Energy SER Colombia, shared his insights regarding the bankability of contracts and the guarantees that can be given in the current scenario.
Renewable energy is rapidly penetrating Colombia’s energy mix. According to the latest report on Project Connection Applications of the Unidad de Planeación Minero Energética (UPME), there are already 386 registered projects for a total of 12,742 MW of capacity.
The bulk of these projects are solar PV initiatives, making up 9,776 MW of capacity ready to be installed in coming years. Among those that are already on the way to being implemented, there are 123 solar projects with an approved connection, for a total 5,589 MW.
Given the strong potential for expanding PV generation in Colombia, SER Colombia was invited to participate in a Global Solar Council webinar examining the prospects for PV in the region. The event – “Latin America outlook for PV: Investment opportunities for solar energy in post COVID-19 scenarios” – was organized by the Global Solar Council in collaboration with Energia Estratégica and provided expert perspectives on important emerging markets (Brazil, Argentina, Chile, Colombia and Mexico).
A key question addressed was: is it possible for the Colombian government to convene new auctions for renewable energy? For SER Colombia, the answer is affirmative.
“We see that this can happen, in the short or medium term, maybe,” said Ramiro Arellano Price, chairman of the board at SER Colombia. “We are looking for this possible experience to be repeated as soon as possible.”
This would be just the beginning. “Private auctions” are also apparently close to being regulated and implemented. The new energy trading mechanisms under discussion (CREG 114 of 2018) are interesting for distributors to complete the 10% mandatory of non-conventional renewable sources according to the goals of the National Development Plan established by 2022.
“We hope that the new mechanisms between private parties are implemented soon,” commented the SER Colombia chairman.
Another urgent question that SER Colombia was on hand to comment on was what financing possibilities exist in the current scenario. Is it possible to move forward with Project Finance in Colombia? In this regard, Ramiro Arellano Price focused on three major aspects: bankability of PPAs, providing guarantees and risks for financial institutions.
To get the full perspective of SER Colombia’s Ramiro Arellano Price, see the webinar slides and listen to the event recording here.