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Colombia can lead the energy transition in Latin America

Article Republished By Javier Troconis

As the gateway to South America, Colombia has the potential to be a world-class producer of renewable energy. Access to both the Atlantic and Pacific Oceans—the only such place in South America—allows for the formation of mature, global maritime networks for renewable energy exports. Colombia’s northern coast, specifically, boasts high wind speeds and solar radiation primed for exploitation.

Recognizing this potential, the Colombian government has made concerted efforts to push the country towards becoming a regional renewable leader.

The Guajira region, located in northeastern Colombia, is at the epicenter of the domestic wind energy industry given its advantageous peninsular location and arid flat terrain, where winds move uninterrupted with speeds ranging from 8.5 to 8.75 meters per second, above global averages. President Duque’s administration is developing a series of sixteen new wind farms across the region. The first, the Guajira I wind farm, is estimated to become operational this year and provide 20 megawatts (MW) of power. If all projects are completed on schedule by 2031, the wind farm network could power 17 percent of the country’s electric grid. Municipalities are following in the national government’s footsteps. Barranquilla, the largest Colombian city on the Caribbean coast, signed an agreement with Copenhagen Infrastructure Partners for a feasibility study to explore a 350 MW offshore wind farm.

Wind energy represents only a part of the country’s long-term renewable prospects. Colombia is also expanding its hydrogen capabilities, drawing investors and pilot projects to its rapidly growing market. In March, Ecopetrol, the country’s state-owned hydrocarbon company, inaugurated Colombia’s first green hydrogen pilot project at its Cartagena-based refinery. The project will be paired with a $140 million annual investment until 2040 for green hydrogen production. Colombia’s Caribbean coast is well positioned for green hydrogen due to its advantage in clean energy generation—evidenced by Guajira—alongside well-established ports that have easy access to the Americas and Europe for potential export. The levelized cost of hydrogen in Colombia is expected to reach parity with other hydrogen market leaders, such as Chile and Australia, by 2030. Estimates indicate that green and blue hydrogen production together could reach between 3.2 and 5.8 megatons by 2050.

However, political and technical barriers have inhibited Colombia’s clean energy development and continue to strain scalability. To legally construct infrastructure in the Guajira territory, the government must retain approval from its residents, the indigenous Wayúus, a community that faces high rates of poverty, malnutrition, and unemployment compared to national averages. Critics allege that the region has been historically neglected from partnerships and development opportunities in the region, and that improper compensation has been given for land bought for project development. This trend continued in the creation of the country’s first wind farm, Jepírachi, in 2004, and similar complaints have been alleged in ongoing wind power projects. The Wayúus argue that wind projects take large swaths of land from the community and do not compensate them adequately for the land’s worth. Tense relationships in the region have thus sapped the region of its advantageous geography’s utility.

The Jepírachi wind farm also typifies the technical hurdles faced by wind farm investment in Colombia. Mismanagement and improper upkeep have caused long-running delays in operation and weakened the effectiveness of plant capabilities. Beyond the issues this disuse presents to steady generation, it deprives green hydrogen facilities of the energy inputs they need, dimming domestic hydrogen prospects.

To meet the country’s renewable potential, the Colombian government should follow a two-pronged approach: foster an environment to attract foreign and domestic investment across a diverse project portfolio, and include local communities and municipalities as leaders in renewable project development.

Existing government initiatives, such as the Energy Transition Law No. 2099, create a fiscal frame and tax benefits for unconventional renewable investment, which includes green and blue hydrogen. Bill 365, which promotes non-traditional fuel sources, is another good starting point. The passage of a domestic emissions trading system and more expansive tax benefits for companies investing in hydrogen would provide even more robust pathways for blue and green hydrogen development.

Adequate private and public investment is a necessity but must also be paired with accountability to ensure the proper inclusion of disadvantaged and local communities in the development of renewable projects. The inclusion of Colombian municipalities on the Caribbean coast would expand continuous clean power access to a region that is partially disconnected from the national grid and faces frequent outages. But inclusive rhetoric alone is insufficient. When appropriate, concessions should be made both to pursue environmental justice and to ensure the wind farm project’s longevity.

The path towards Colombia’s decarbonization is not simple. The country will continue to confront significant hurdles as it looks to leverage its advantages in renewable energy potential. However, should the government follow a holistic strategy, it would be poised to successfully deploy its expansive resources and emerge as a renewable leader in Latin America.

Juan Gomez is a Spring 2022 Young Global Professional at the Atlantic Council Global Energy Center.

Learn more about the Global Energy Center

The Global Energy Center promotes energy security by working alongside government, industry, civil society, and public stakeholders to devise pragmatic solutions to the geopolitical, sustainability, and economic challenges of the changing global energy landscape.

Image: Iván Duque Márquez, President of Colombia, visits the European Council. (Alexandros Michailidis, Shutterstock, Editorial Use Only) https://www.shutterstock.com/license

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