Colombia power sector green vow draws mixed reviews

Market: Coal, Electricity, Emissions
12/03/21

A new pledge by Colombia's power sector to coordinate actions to reduce GHG emissions is drawing mixed reviews.

US utility AES, Colombian generators Celsia, Urra and EPM, Italy's Enel and Colombia's state-controlled transmission giant Isa and its subsidiaries Transelca and grid manager XM signed an agreement to help Colombia reach its previously announced goal of cutting the mining and energy sector's emissions by 11.2mn tons (t) by 2030, off an annual average of 32.3mn t, the mines and energy ministry said this week.

Colombia emits an average 237mn t/yr of total GHG emissions, or just 0.46pc of the global total, partly thanks to extensive hydroelectric generation. But it still relies on thermal units for baseload generation, as well as oil and coal production and exports as key economic drivers. Coal-fired power plants alone account for about 7.5pc of Colombia's 17.8GW of installed generation capacity.

The agreement signed this week does not commit the generators to wind down coal generation as is happening in other parts of the world, such as the EU and Chile.

Colombia has also been a latecomer to renewables such as solar and wind. Only around 10pc of the country's total installed generating capacity will come from renewables in 2022, up from 1pc in 2018.

Former environment minister Manuel Rodriguez urged Colombia to focus on tackling emissions from sectors other than energy, because thermal plants using natural gas, coal and oil provide strategic back-up for hydro and intermittent renewables. Other sectors, such as agriculture and cattle-raising, generate more emissions. Deforestation is another significant challenge, especially because the state has little control over the Pacific and Amazon regions where forests are being lost, he told Argus, referring to pockets of armed conflict that continue to plague the country.

Deforestation accounts for some 52mn tCO2e/yr of emissions, agricultural activities 52.9 mnt t CO2e/yr and forestry "land management" 79.2mnt CO2e/yr, according to government data.

One step in Colombia's green campaign is a renewed government push to impose a carbon tax on coal consumption in the power and industrial sectors. The tax on coal consumers is expected to be around $13/tCO2e, according to coal federation Fenalcarbon's new president Carlos Cante.

Thermal generators say the tax will cause utility bills to skyrocket.

The Center for Research and Popular Education (CINEP), a local environmental group, advocates more agressive energy transition policies.

"The concept of energy transition in Colombia is not going deep enough," Cinep researcher Jenny Paola Ortiz told Argus. "Coal exploitation is not environmentally sustainable."

By Diana Delgado

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