The Pivotal Role of Renewable Energies in Mitigating El Niño’s Impact in Colombia

Colombia is grappling with one of the most severe droughts in its history, disrupting electricity supply and spiking energy prices – a crisis that necessitates the massive integration of wind and solar power.

The El Niño phenomenon has caused an alarming drought across Colombia. The impact has been so severe that in early April, authorities in Bogota initiated a potable water rationing plan for certain areas. Reservoir levels, barely exceeding 32% compared to 70% in December 2023, are among the lowest in four decades, significantly hampering energy production capacity. The nation’s electric grid comprises 66.3% hydroelectric power, followed by 31.2% thermal power plants, while non-conventional renewables account for a mere 2.5% (2.4% solar and 0.1% wind).

In response, the government has implemented 15 urgent measures to avert blackouts, including monitoring and controlling power plants, enacting specific regulations to incentivize electricity production, improving cash flow for retailers, shielding end users from price hikes, expanding generation capacity with additional thermal and non-conventional renewable sources (1,029 MW in testing, of which 31.9 MW are from wind and 997.1 MW are solar), and promoting energy conservation. Suspending electricity exports to Ecuador is another step taken.

Exacerbating this situation is the burgeoning electricity demand, which surged by 7.5% in March compared to the same month last year, tripling the average annual growth rate of 2.5%. This escalation is driven by a 10.5% increase in consumption in the Caribbean region, which has endured the brunt of El Niño’s scorching temperatures, necessitating increased energy use for cooling.

Current rainfall levels allow for a mere 60 GWh of water-generated electricity per day, a fraction of the 232 GWh per day required for the system to operate. Consequently, diesel thermal plants – one of the most polluting and costly technologies in the system – must be utilized, contributing another 110 GWh. The remaining 60 GWh needed to meet demand are extracted from reservoirs, depleting these reserves.

This fact has caused a sharp spike in energy prices. According to XM, in March the average price on the Energy Exchange stood at 622.33 Colombian pesos per kWh, an 8.56% increase from the previous month’s 573.22 pesos per kWh. This figure continues to soar, with the average price in April reaching 988.59 pesos per kWh, compared to 231.53 Colombian pesos per kWh in 2023.

Renewables: A More Competitive Matrix

The surge in electricity prices directly impairs the competitiveness of businesses and industries, operating at higher costs, and thus the country’s overall competitiveness. Furthermore, the reliance on costlier and more polluting thermal power plants contradicts environmental commitments. At the recent COP28, Colombia advocated for the Fossil Fuel Non-Proliferation Treaty, aimed at halting all new oil, coal, and natural gas explorations and gradually phasing out current production and consumption. Additionally, the country has pledged to reduce greenhouse gas emissions by 51% by 2030 and achieve carbon neutrality by 2050.

While Colombia’s electric matrix is relatively clean due to its substantial hydroelectric contribution, natural phenomena, like El Niño, critically undermine electricity supply, necessitating the use of highly polluting and economically costly thermal sources like diesel. Therefore, it is imperative for the country to incorporate a greater volume of non-conventional renewable energies into its energy mix, such as wind and photovoltaic solar power, which are among the most cost-competitive globally.

A 2023 report by the International Renewable Energy Agency (IRENA) indicates that the global weighted average cost of energy (LCOE) for wind farms in 2022 was $33 per MWh (128 Colombian pesos per kWh), while photovoltaic solar projects averaged $49 per MWh (191 Colombian pesos per kWh).

Accordingly, Colombia has secured contracts for nearly 3,000 MW of wind and solar energy at prices below 200 Colombian pesos per kWh in two long-term renewable energy auctions. In October 2019, 2,085 MW across 14 projects were awarded at an average price of 95 Colombian pesos per kWh, and in 2021, another 11 projects totaling 796.3 MW, all from photovoltaic solar power, were awarded at an average price of 155.81 Colombian pesos pesos per kWh. Despite an additional Reliability Charge of around 60 Colombian pesos kWh, this energy is still significantly cheaper than the over 900 Colombian pesos per kWh recorded in April this year.

However, only a fraction of these projects have come into effect due to various impediments, primarily the complexity of obtaining the necessary environmental permits.

Therefore, it is crucial for Colombia to accelerate the diversification of its electric matrix to ensure a reliable system capable of providing clean energy at competitive prices, even during contingencies like El Niño.

Storage as a Complement to Renewables 

Given its wind and solar resources, Colombia could emerge as a renewable energy powerhouse, meeting all the projected growing electricity demand of 263.4 GWh per day by 2028, a 13.5% increase from the current consumption of 232 GWh/day.

According to the map of suitable zones for wind and solar energy generation developed by Energética 2030, an inter-institutional alliance led by the National University of Colombia (UNAL) and comprising 11 organizations including universities and private companies, the country boasts a potential of 35,000 MW in wind power, with optimal conditions in the northern Caribbean regions (departments of La Guajira, Magdalena, and Atlántico), while its solar potential is virtually incalculable given the proximity to the equator, ensuring near-vertical sunlight throughout the year.

Based on this potential, the Mining and Energy Planning Unit (UPME) has designed a map of all assigned and approved energy projects, totaling around 23,500 MW, divided into 16,329.71 MW from photovoltaic solar, 3,991.5 MW wind, 1,018.54 MW thermal, and 2,527.55 MW hydroelectric energy.  

These energy plants are expected to gradually start working by 2032. If realized, solar energy in Colombia would surge from the current 2.5% of the electric matrix to 40%, with operational capacity rising from 486 MW to 16,815.71 MW, surpassing hydroelectric power. Wind energy would represent 9%, reaching 4,009.92 MW.

Such a diversified electric matrix would drastically reduce energy exchange prices. The transformation would be so profound that two new challenges, akin to those faced by Chile – a country with 44% of its installed capacity in wind and solar energy – would arise.

Firstly, during peak renewable energy production hours, energy exchange prices plummet to $0 per MWh in various regions. While beneficial for consumers, this is not favorable for energy project developers who invest in the continued development of the electric system. Moreover, in other hours without renewable energy generation, prices spike, causing significant intraday price disparities.

Secondly, Chile grapples with the challenge of managing substantial volumes of variable energies (wind and solar photovoltaic) that must be consumed as generated because they are non-preservable. That is, they are generated in the presence of wind or sunlight, respectively, and must be consumed at that moment. This leads to “excess” energy situations where many plants must curtail production during certain hours.

To address both challenges, Chile is advancing incentives for battery storage. This technology allows for storing renewable energy surpluses and injecting them into the electric grid during peak demand hours, preventing curtailments and price disparities, and creating harmony in the electric grid.  

Therefore, Colombia needs to adopt measures that facilitate the rapid incorporation of non-conventional renewable energy sources. Diversifying its electric matrix with wind and photovoltaic solar energy will ensure supply and competitive prices during climatic contingencies.

Conclusion

Transitioning to such renewable energies will enable the country to withstand climate phenomena like El Niño, which are intensifying every single year, and mitigate potential impacts on the electric system from new events or unpredictable climatic conditions caused by environmental degradation.  

Moreover, migrating towards clean energy, such as wind and solar photovoltaic, including the incorporation of battery storage, will allow Colombia to fully capitalize on its resources for renewable energy generation and elevate its electrical system to a new level—much more resilient, capable of regulating costs, attracting investments, and achieving decarbonization goals more swiftly.

This article was created in partnership with Castleberry Media.. At Castleberry Media, we are dedicated to environmental sustainability. By purchasing Carbon Certificates for tree planting, we actively combat deforestation and offset our CO₂ emissions threefold.