Colombia’s first solar and wind power auction brings average price of $0.027/kWh

Three solar projects and five wind facilities were contracted in the procurement exercise. The auction’s final average electricity price was COP95/kWh, with a maximum bid of COP110.

Colombia’s National Mining and Energy Planning Unit allocated 2.2 GW of solar and wind power generation capacity in the country’s first renewable energy auction, which was finalized yesterday. The exercise’s final average price was COP95/kWh ($0.027), and the highest bid reached only COP110.

The authority said the auction will enable the country to raise its installed renewable energy capacity from around 50 MW currently to 2.2 GW at the beginning of 2022. No details were released about the assigned capacity of the eight winning projects, of which three were solar parks and five were wind power plants.

The government department behind the auction added, the final energy price was around COP50/kWh lower than the average price of bilateral power purchase agreements (PPA) in Colombia.

Projects selected in the auction will be entitled to a 15-year PPA and must come into operation by January 1, 2022. Contracts will be linked to the Colombian peso and updated based on a producer price index certified by Colombia’s National Administrative Department of Statistics.

In a previous, failed attempt to hold the auction in February, 12-year PPAs were offered. No projects were assigned because the offers received did not meet criteria set for ensuring market competition. That exercise saw 15 companies submit bids for 22 projects: 17 of them solar plus four wind projects and a biomass facility.

More to Explore!