The Untapped Potential of Renewables in Colombia
Posted by Pedro Gonzalez, CPA on Nov 5, 2014
Colombia provides the best investment opportunity in South America in the area of renewables. Colombia provides growth, economic stability, investment incentives and a friendly government. Colombia is a country with great potential and safe for renewable energy investments.
I have had the pleasure to live in the country for six years which provided me with the opportunity to learn about the culture and the how to do business in Colombia. This has provided the knowledge to back up my statement above.
Here are a couple of points for your consideration:
1. Hydropower – According to a recent study by the World Bank, 70 percent of Colombia’s power generation is through hydropower. At first glance it seems that this sector is saturated, but the reality is that hydropower energy in Colombia is far from saturated. Accroding to sources from Mining and Energy Planning Unit in Colombia, the current hydropower generation is 9GW and its potential is 90GW a 10X growth potential. In my opinion, small hydropower have the best potential due to the low investment cost and the available terrain for its installation when compared to large hydropowers.
2. Biomass – This is another area with strong growth potential for biodiesel and ethanol projects. Colombia has great biomass potential that comes from banana, coffee pulp, and animal residues. Energy from sugar cane, which actually produces 31,5 MW, presents the biggest potential given the immense amount of available baggasse (6 m. tonnes/year). According to Biofuels Federation Colombia currently produces 506,000 tons/year of biodiesel and it has a 8X growth potential and the ethanol production is 1.3 million liters/day with a 10X growth potential.
3. Wind – Colombia’s wind power remains largely untouched and it provides greatest potential. Of all South America, Colombia has the best geological conditions to provide stable wind power. Offshore regions of northern Colombia have been classified with class seven winds (winds over nine meters per second). The only other region in South America that has such potential is the Patagonia region of Chile and Argentina. The Guajira Peninsula alone has the potential to generate 21 GW, enough power to provide for the country two times over. However, it currently has an installed capacity of only 19.5MW, just 0.4 percent of its potential.
4. Solar – Another area untapped in this country. In South America, Colombia provides the best solar potential with daily average of 4.5 kWh/m. However, only 6 MW of photovoltaic energy developed. Underdeveloped considering that Colombia´s daily energy potential is 4.5KWh/m.
Colombia potential does not stop at the potential at the national level. Colombia has the potential to become an energy provider to other parts of South America that are currently in need of energy such as Venezuela, Ecuador, and Chile.