Renewable energy auctions in Colombia: Context, design and results

1www.irena.orgRenewable energy auctions in Colombia:Context, design and results ABOUT IRENAThe International Renewable Energy Agency (IRENA) serves as the principal platform for international co-operation, a centre of excellence, a repository of policy, technology, resource and financial knowledge, and a driver of action on the ground to advance the transformation of the global energy system. An intergovernmental organisation established in 2011, IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy, in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity. www.irena.org DISCLAIMER This publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA to verify the reliability of the material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-party content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or liability for any consequence of use of the publication or material herein. The information contained herein does not necessarily represent the views of all Members of IRENA. The mention of specific companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in preference to others of a similar nature that are not mentioned. The designations employed, and the presentation of material herein, do not imply the expression of any opinion on the part of IRENA concerning the legal status of any region, country, territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundariesABOUT USAIDThe United States Agency for International Development (USAID) is the world’s premier international development agency and a catalytic actor driving development results. USAID’s work advances U.S. national security and economic prosperity, demonstrates American generosity, and promotes a path to recipient self-reliance and resilience.DISCLAIMER This publication was produced for review by the United States Agency for International Development. It was prepared by the Scaling Up Renewable Energy Project (Tetra Tech ES, Inc., prime contractor). The views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.ACKNOWLEDGEMENTS This report, prepared under the guidance of Rabia Ferroukhi and Diala Hawila (IRENA), was authored by Carlos Guadarrama (IRENA), Alexandre Viana (IRENA consultant), Jairo Gutiérrez and Adrián Paz (Tetra Tech). Valuable contributions were made by Sarah Lawson, Thomas Black and Kristen Madler (USAID).Various sections benefitted from the reviews and inputs of Abdullah Abou Ali, Mohammed Nababa, Imen Gherboudj and Sonia Rueda (IRENA), Mauricio José Baez Atuesta and José Ignacio Escobar (Acciona), Leonardo Beltrán (Institute of the Americas), Lisa Viscidi (The Inter-American Dialogue), Máté Heisz (SolarPower Europe) and Juan Roberto Paredes (Inter-American Development Bank). The Ministry of Mines and Energy of Colombia (Ministerio de Minas y Energía) also provided valuable input.Available for download: www.irena.org/publications. For further information or to provide feedback: info@irena.orgCITATION IRENA and USAID (2021), Renewable energy auctions in Colombia: Context, design and results, International Renewable Energy Agency, Abu Dhabi ISBN 978-92-9260-313-72Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed and/or stored, provided that appropriate acknowledgement is given of IRENA as the source and copyright holder. Material in this publication that is attributed to third parties may be subject to separate terms of use and restrictions, and appropriate permissions from these third parties may need to be secured before any use of such material.© IRENA 2021 Contents KEY FINDINGS 51 DESIGN OF RENEWABLE ENERGY AUCTIONS 61.1. Auction demand 121.2. Qualification requirements and documentation 151.3. Winner selection and contract award process 161.4. Risk allocation and remuneration of sellers 192 RENEWABLE ENERGY AUCTION RESULTS 242.1. Participation and competition 252.2. Price outcomes 283 FACTORS AFFECTING PRICES 323.1. Country-specific conditions 343.2. Investor confidence and learning curve 343.3. Policies supporting renewables 354 CONCLUSIONS 38 ANNEX: FLOWCHART OF COLOMBIA’S SECOND RENEWABLE ENERGY AUCTION 42 REFERENCES 44 ABBREVIATIONSPHOTO CREDITS Pages 10, 17, 20, 37: Shutterstock Page 35: PexelPages 11, 18, 20, 23, 29, 39, 40-41: Freepik FIGURESFigure 1. Colombia’s installed generation capacity (in MW and %) in 2019 9 Figure 2. Colombia’s generation share by technology, 1990-2018 9Figure 3. I