Comments for regulatory proposals on the expansion of electricity generation

Comments for regulatory proposals on the expansion of electricity generation

Ministry of Mines and Energy. Bogota D.C. May 29th, 2018. With the publication for receiving comments of four resolutions from the Commission for the Regulation of Energy and Gas (CREG), which propose mechanisms and alternatives for guaranteeing firm energy in order to fulfill electricity demand in the medium and long term, the National Government is advancing in the analysis of the expansion scenarios of the Colombian electrical system.

This is an exercise undertaken by the Ministry of Mines and Energy as well as its affiliated entities based on the projected demand and the possible scenarios for the entry of new generation projects.  

It should be specified that, since 2006, Colombia has set up a regulatory scheme with a Reliability Fee used by energy generators in order to commit to delivering a product known as firm energy, that is, the amount of energy that a power plant (generation asset) can deliver with certainty under very dry conditions of hydrology. 

Within the framework of the recent analysis, the regulator proposals published by the CREG in order to receive comments consist of the following:

  1. Call for carrying out an auction for the sale reconfiguration of firm energy obligations (OEF) for 2018-2019. This is a mechanism established within the reliability charge by taking into account the current balance of firm energy available within the system.
  2. Proposal for the managed assignment of the reliability fee for existing generation plants, corresponding to the 2019-2020, 2020-2021 and 2021-2022 periods, as part of the existing mechanisms found within the regulations of the reliability charge.  
  3. Carrying out an auction for the expansion of the reliability fee for 2022-2023, seeking to define what electricity generation projects with firm energy will cover the growth of demand within said period, consistent with the 4 year planning period established by the regulations. As an additional element, an incentive for the projects which may start operating before that date, that is to say by 2021 or the previous year, has also been included.
  4. Proposal for a new mechanism for promoting the entry of new electricity generation projects that can contribute firm energy to the system, but which do not participate in the expansion auction.  
The Ministry, the CREG and the UPME, acting within the framework of compliance with their duties, shall continue analyzing the evolution of the electrical system, and applying the regulatory mechanisms for guaranteeing that demands are fulfilled and providing efficient electricity services.

You must to be a registered user to add comments


Report abuse
  • Other