Colombia (2012)

Source: REEEP Policy Database (contributed by SERN for REEEP)

This policy & regulatory overview is not updated anymore since 2015. We decided to keep it online due to high demand but would like to make you aware of the fact that it might be outdated.

Energy sources

Total installed electricity capacity (2010): 13.531 MW
Hydro-electricity: 68%
Fossil fuels (coal and natural gas): 32%.

The share of thermal participation in generation has increased since the mid-1990s. This has happened in response to the 1992/1993 crisis caused by El Niño associated droughts and the high reliance of power generation on hydroelectric installations that lacked multi-year storage capacity.  As a result of the new policies adopted by the country, the dominance of hydropower in the generation portfolio has been reduced from 80% in the early 1990s to less than 65% today.

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Colombia is the major coal exporter of Latin America with 7.3 billion short tons of proven reserves it has one of the largest coal reserves in Latin America.

Colombia had proven natural gas reserves of 113.3 billion cu m (1 January 2011 est.). The country produced 10.49 billion cu m (2009 est.) and consumed 8.69 billion cu m (2009 est.).

Colombia is a net oil exporter since 1986. Colombia had 1.9 billion bbl (1 January 2011 est.), the fifth-largest in South America.

Colombia imported only very small volumes of electricity from Venezuela and Ecuador (0.02 TWh each).

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Extend network

National electrification rate (2009): 94%

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Capacity concerns

Despite significant improvements in the security situation in the country, Colombia's electricity sector continues to face serious supply and financial challenges due to lack of investment, security risks and power theft. Repeated attacks on electricity infrastructure increase the risk of blackouts and raise cost of operation for the electricity sector. Service quality in Colombia, as measured by service interruptions, is much lower than the average for Latin America and the Caribbean. In 2005, the average number of interruptions per subscriber was 185.7, far above the regional average of 13 interruptions.  The duration of interruptions per subscriber was 66 hours, also far above the regional average of 14 hours.

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Renewable energy

In 2007, Colombia had 28.1 MW installed capacity of renewable energy (excluding large hydro), consisting mainly of wind power.

The total large hydropower potential for Colombia is estimated at 93 GW, with an additional 25 GW of small hydropower (<20 MW).

Solar energy
Colombia has significant solar power resources because of its location in the equatorial zone, but the country sits in a complex region of the Andes where climatic conditions vary. The daily average radiation is 4.5 kWh/m2, and the area with the best solar resource is the Guajira Peninsula, with 6 kWh/m2 of radiation.

Wind energy
The wind regime in Colombia is among the best in South America. Offshore regions of the northern part of Colombia, such as in the Guajara Department, have been classified with class 7 winds (over 10 m/s). The only other region in Latin America with such high wind power classification is the Patagonia region of Chile and Argentina. Colombia has an estimated theoretical wind power potential of 21 GW just in the Guajara Department.

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Energy efficiency

The Decree 2501 was approved in 2007. It enacts provisions to promote practices for purposes of rational and efficient use of energy and defines some general guidelines PROURE (Programa de Uso Racional y Eficiente de la Energía y demás Formas de Energía no Convencionales).

By Resolution 180919 of June 1, 2010, the Indicative Action Plan 2010-2015 is adopted to develop, the PROURE. Its goals, subprograms and other dispositions are defined through the resolution.

The Decree 2331 of 2007 and Decree 895 of 2008 require the substitution of low efficacy light sources in all the country's public institutions.

The Decree 3450 of 2008 prohibits the import, sale and use of low-efficiency light sources around the country starting January 1, 2011.

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Electricity market
The electricity sector has been unbundled into generation, transmission, distribution and commercialization since sector reforms carried out in 1994. As part of liberalisation, the Colombian government has continued to reduce its stake in generating companies. About half the generation capacity is now privately owned.

Private participation in electricity distribution is much lower.

In the generation sector, there are about three dozen active companies. EMGESA is the largest, controlling about one-fifth of generating capacity.

While numerous companies own different parts of the grid, the largest holder is Interconexión Eléctrica S.A. (ISA), controlling about 70% of the system. Formerly wholly-owned by the Colombian government, the public stake in ISA shares has declined to 59%. ISA controls 83% of Colombia’s electricity transmission market and has one of the largest transmission networks in Latin America.

Liquid fuels market
The hydrocarbon sector is owned and managed by the state controlled company Empresa Colombiana de Petróleos (ECOPETROL). As a part of the reform plan, the government is trying to increase private participation, notably of international companies.

Gas market
The gas market is controlled by 3 main companies: ECOPETROL (exploration and development of natural gas reserves), CREG (overseas regulation and distribution markets) and ECOGAS (manages the natural gas transmission system).

Coal market
The coal market was privatised in 2004. The largest coal producer in the country is the Carbones del Cerrejon Consortium, composed of Anglo-American, BHP Billiton, and Glencore.

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The Public Utilities Law (Law 142) and Energy Law (Law 143) divide the electricity market into four main activities: generation, transmission, distribution and retail.

The Energy and Gas Regulatory Commission maintains a strict division between generation, transmission and distribution activities, though it allows some legacy companies to maintain vertically-integrated operations.

Colombia is one of the few countries in Latin America to have successfully implemented a wholesale electricity market, operating since 1995. Power is traded over a day ahead hourly market or through bilateral contracts. In the day-ahead market, players summit hourly bids. An Independent System Operator ranks bids and defines the spot price required to satisfy the forecasted demand.

There is also competition at the retail level.

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Energy framework

In 2001, Law 697, which promotes the efficient and rational use of energy and alternative energies, was promulgated. This Law was regulated by Decree 3683, issued in 2003. The Law and the Decree contemplate important aspects such as the stimulus to education and research in renewable energy sources (RES). Nevertheless, the program created under this law lacks fundamental aspects to encourage the development of RES significantly, such as a regulatory support systems to encourage investment, the definition of policies to promote renewable energy, or quantitative targets for the share of renewable energy.

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Role of government

The Ministry of Energy and Mines is responsible for energy planning and regulation. Regulation is carried out though the Energy and Gas Regulatory Commission. Energy Planning is carried out though the Mines and Energy Planning Unit.

The Unidad de Planeación Minero Energética (UPME) will be organized as a special administrative unit under the Ministry of Mines and Energy, with its own assets and legal and special arrangements for recruitment and personnel management, wages and benefits, and budgetary autonomy. Its role is to develop in a participatory manner the integrated planning of the energy and mining sector.

The Institute of Planning and Promotion of Energy Solutions for Non-Interconnected Areas (IPSE) is attached to the Ministry of Mines and Energy and is in charge of executing the guidelines and policies of the Ministry, through plans, programs and energy infrastructure projects, aimed at encouraging the production processes and improving the quality of life of populations in their area, in a way that is technologically, economically, environmentally and socially sustainable.

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Government agencies

The National Planning Department is a technical entity that advises the President on sustainable development including energy issues.

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Energy procedure

Plan Energético Nacional 2006 – 2025

Estrategia Energética Integral 2003 – 2020.

The energy policy of the country is defined by the National Energy Plan 2006-2025, and its Integral Energy Strategy 2003-2020 in which a diagnosis of the energy supply and demand is presented, and some objectives and strategies on the short, medium and long term are defined for different future scenarios.

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Energy regulator

The Energy and Gas Regulatory Commission created in 1994.

Superintendence of Public Services created in 1991.

Superintendence of Industry and Commerce created in 1968

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Degree of independence

The Energy and Gas Regulatory Commission is an administrative unit within the Ministry of Mines and Energy).

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Regulatory framework

As said previously, despite the country’s large potential in new renewable energy technologies, this potential has been barely tapped. A 2001 law designed to promote alternative energies lacks certain key provisions to achieve this objective and has had little impact so far.

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Regulatory roles

The Energy and Gas Regulatory Commission functions are:
Access and tariff regulation for transmission and distribution networks.
Preserve and promote competition. Determine conditions for gradual liberalisation of the electricity industry.

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Energy regulation role

Regulatory tasks are carried out by the Energy and Gas Regulatory Commission.

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Regulatory barriers

No real regulatory framework and support mechanisms for sustainable energy.

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Ministerio de Minas y Energia. El sistema electrico Colombiana. July 2010. Available at: [Accessed 17th September 2013]

World Bank. Colombia: Recent Economic Developments in Infrastructure. Balancing and Productive Needs for Infrastructure. November 2004. Available at: [Accessed 17th September 2013]

CIA World Fact Book. Colombia. Available at: [Accessed 17th September 2013]

World Bank. World Development Indicators 2011. Available at: [Accessed 17th September 2013]

World Bank. Benchmarking data of the electricity distribution sector in Latin America and Caribbean Region 1995-2005. Available at: [Accessed 17th September 2013]

Colombian Energy Sector Management Assistance Program (ESMAP). Review of policy framework for increased reliance on wind energy in Colombia. 2009. Available at: [Accessed 17th September 2013]

Ministerio de Minas y Energia. Available at: [Accessed 17th September 2013]

Ministerio de Minas y Energia. El sistema electrico Colombiana. July 2010. Available at: [Accessed 17th September 2013]

Global Energy Network Institute. National Energy Grid Colombia. Available at: [Accessed 17th September 2013]

VSUS Technologies. Available at: [Accessed 17th September 2013]

Unidad de Planeacion Minero Energetica. Available at: [Accessed 17th September 2013]

Instituto de Planificacion y Promocion de Soluciones Energeticas para las Zonas No Interconectadas (IPSE). Available at: [Accessed 17th September 2013]

Superintendencia de Industria y Comercio. Available at: [Accessed 17th September 2013]

Superintendencia de Servicios Públicos. [Accessed 17th September 2013]

Comisión de Regulación de Energía y Gas. [Accessed 17th September 2013]

Unidad de Planeacion Minero Energetica (UPME). Plan Energético Nacional 2006 – 2025. Available at: [Accessed 17th September 2013] Close References