Colombia awards 250GWh at firm energy auction

Colombia awarded contracts totalling 250.55GWh at an auction for firm energy obligations as part of efforts to mitigate risks associated with the embattled Hidroituango dam, the mines and energy ministry said on Friday.

Electricity from greenfield projects totalled 37.37GWh, with developers committing to 4.01GW of new capacity, almost a quarter of the country's current total.

The closing price for contracts was US$15.1/MWh, down from US$17.01/MWh at the last firm energy auction, according to sector regulator Creg.

Among the generators securing contracts were Isagén, Celsia, Epsa, EPM and Enel Green Power Colombia.

"The auction has brought very positive results: reliability, efficiency and sustainability," mines and energy minister María Fernanda Suárez said.

The 12-month contracts, which begin in December 2022, were assigned to 70 projects, 47 of which are new.

All but seven of the winning bids were for hydroelectric and thermoelectric plants. There were two solar parks – Emgesa's El Paso and Enel's Loma Solar – and five wind farms with combined capacity of 1.39GW.

Bonus payments and contract extensions have been offered to developers that begin operations of greenfield projects ahead of the contract period.

Generators that acquire firm energy obligations – needed to cover forecast long-term demand – are required to supply power to the market at a set price during times of scarcity.

The government said the new contracts will help to guarantee medium and long-term supply amid doubts about the future of the 2.4GW Hidroituango plant, which has suffered a series of major construction problems.

The auction came just two days after Colombia's mines and energy ministry failed to award a single bid at the country's first auction for long-term PPAs from non-conventional renewable sources.

Officials said the result was due to antitrust rules, as contracts would have been awarded to only a small number of the auction's participants.

Results of the auction for firm energy obligations can be seen here and here.