Colombian generators call for gas market changes

A decline in production and an increase in demand for natural gas, coupled with transport restrictions from inland fields and little regulatory flexibility has left Colombia's thermopower park without the possibility of generating and/or backing up its firm energy obligations with a cost-efficient fuel.

That is the opinion of the country's power generator association Acolgen, which adds that this situation, in addition to project delays, has led to increased liquid fuel-fired electricity production to cover demand.

"In a country such as Colombia, with high hydropower potential and a power generation matrix based principally on this technology, it's very important to have cost-effective thermopower generation to allow electric power demand to be covered during periods of low rainfall, and in normal conditions, meet demand requirements that cannot be supplied solely with hydropower generation," says Acolgen.

Álvaro José Rodríguez from Bogotá-based law firm Posse Herrera Ruiz told BNamericas, "the country is at a very complex crossroads, because we're facing a gas shortage in the next two or three years."

Acolgen has recommended structural solutions for the gas market to help the power sector achieve greater competitiveness and sustainability, including:

- Allow smaller and non-conventional fields to connect to secondary gas transport pipelines to reduce congestion on main lines and generate surplus for offtakers;

- Improve reporting of gas reserves to help planning and coordination between government entities, such as hydrocarbons regulator ANH, to bring projects online;

- Greater centralized and simultaneous planning of the gas and power sectors;

- Implement an intra-day market to access surplus gas to provide system flexibility;

- Prioritize the import of Venezuelan gas and the use of gas no longer exported and establish mechanisms to access LNG.

"The lack of coordination between the gas and power sectors is one of the greatest worries for thermoelectric generators that use natural gas," according to Acolgen.

EL NIÑO

On a related note, local power wholesaler XM reported that levels at the country's power generation dams at October 31 were at 62.5%, 15 points below a year earlier, as a result of weather phenomenon El Niño.

Water flow to the dams in October was 49.5% of the historical average for the last 40 years, a "worrying" figure for one of the country's wettest months, XM said.