Colombia Energy Auction No. 01-2019 Bidding Rules (Unofficial Translation)

This is an unofficial English translation of the public tender document produced by Colombia’s National Mining and Energy Planning Unit (UPME). Official documents and associated addenda are available on UPME’s website.

Colombia’s Ministry of Mines and Energy (MME) plans to hold the country’s first variable renewable energy (VRE) auction in 2019. Under USAID’s technical assistance to Colombia, this unofficial English translation of the auction’s bidding rules is provided as a general reference.

Republic of Colombia, Ministry of Energy and Mines, Mining and Energy Planning Unit – Long-term Power Purchase Tender No. 01 - 2019: Specific Terms and Conditions

Colombia’s Ministry of Energy and Mines (MME) must take the corresponding measures to fulfill the objectives set forth in the Sole Regulatory Decree of the MME, in accordance with the analysis carried out by Colombia’s National Mining and Energy Planning Unit (UPME), in each reference expansion plan for power generation and transmission.

Within this framework, the MME resolved to define and implement a mechanism that promotes long-term purchase for power generation projects in the National Interconnected System, which is complementary to those existing in the wholesale energy market.

The MME delegated — to the UPME — the implementation and administration of the mechanism for selecting generators and distributors that enter into long-term power purchase agreements and ordered a tender to be held, after publishing a few specific terms and conditions, contained in this document. The purpose of the tender is to allocate long-term annual average energy supply agreements between each generator and distributor that are awardees.

Auction Update

Colombia’s Ministry of Mines and Energy (MME) held the country’s first variable renewable energy auction on February 26, 2019. However, due to antitrust requirements set to ensure sufficient competition, the auction resulted in no awards. After the February auction, USAID interviewed 12 auction participants (6 buyers, 6 sellers) and completed an assessment to suggest recommended changes for future auctions. MME revised the auction rules and is preparing a second auction with awards to be announced in late October 2019.