The missing pieces in Colombia's energy transition puzzle

Colombia faces a race against time as it seeks to guarantee new sources of natural gas while promoting investments in renewable energy. 

Adrián Correa, the director general of energy ministry planning unit UPME, tells BNamericas in this, the second part of a two-part interview, how the gas challenge can be overcome and what the next steps are in the country's clean energy transition. 

The first part of the interview can be seen here.

BNamericas: UPME's latest natural gas supply plan warns that Colombia could face a natural gas deficit by 2027 if new sources of supply aren't secured. According to the report, short-term possibilities include restoring a binational gas pipeline that would allow gas to be imported from Venezuela, increasing LNG regasification at the Cartagena SPEC, investing in another new import facility on the Atlantic coast or reactivating the Pacific regasification plant project in Buenaventura. Which of these possibilities offers the best short-term solution, in your opinion?

Correa: The decisions have already been made for several years, because in order to provide reliability to the system, there are already some works being carried out on the transportation system. These additional ones that are being proposed can also diversify the supply of gas. There are different scenarios. One foresaw a cut in 2027, in '29 in others, and '31 in others. That is, depending on the scenario that's being configured, certain decisions will have to be made regarding the particularity of the importation through Buenaventura or expansion in the Caribbean.

That is also part of what Creg [regulatory commission] will surely define in greater detail, because they're the ones who can set the rules for the import mechanism so that we can create a call. So that's part of the debate we've had with Creg and we will also depend on that signal to be able to advance a new call, on some import mechanism for example.

BNamericas: So the plant in Buenaventura is still on the table as a possibility despite not attracting interest in two previous calls?

Correa: Yes, of course. In fact, it's a project adopted by the ministry, so as long as it's adopted, the mechanisms will have to be looked at to advance it to the call.

BNamericas: Through the ANH, Colombia has launched a bidding process for offshore wind energy projects. Are you optimistic about the participation of national and international generation companies?

Correa: Yes. I've felt that there's a lot of expectation for participation in these rounds where there's much more experience, particularly for European countries. The United Kingdom has made great progress and Denmark has made significant progress. So we've seen that there's interest in this technology. It's still expensive technology. Of course, it's cheaper to have onshore energy than offshore, but it's essential to diversify the sources. These are very long-term projects, so we have to start moving forward now so they happen in the medium term, but it has been seen that there's interest.

BNamericas: One of the possible uses of electricity generation from offshore wind projects is the production of hydrogen through electrolysis. How far is Colombia from producing hydrogen on a commercial scale? Can the offshore wind auction help boost the country's hydrogen economy?

Correa: We've got as far as the development of primarily wind projects in the north of the country and in La Guajira. As soon as the wind projects in La Guajira can come online through Colectora [transmission line], we can attain more competitive prices. Therefore, it depends on having the green light for the generation projects in La Guajira, which will likely be mainly wind projects, in order to produce hydrogen at competitive prices.

BNamericas: Continuing with the topic of new energy initiatives, why does Colombia have so few battery storage projects compared with countries like Chile, Brazil, the US or Australia? What is being done to encourage greater investment in this segment?

Correa: Energy storage continues to be part of the modernization of the system. It's one of the alternatives such as flexible devices and synchronous compensators. There is always a basket of options. The Canadian Solar project in Barranquilla is continuing and some date changes have been requested, but it's a project that's still under construction and in development. And of course, outside of synchronous compensators, which in our analysis we see as much cheaper solutions, we're also analyzing batteries in other nodes of the system obviously.

We have to remember that we already have large batteries that are reservoirs and other countries don't have that. They don't not have this possibility of storing water for a time and then using it, or of playing with the rapid response of some [thermal] plants to provide auxiliary services.

So that also makes it difficult sometimes, due to costs, for some battery projects to be closed. It's specifically because of the characteristics of our system. But they are an alternative, along with synchronous compensators, which are surely faster and definitely cheaper solutions.