USAID Support for Renewable Energy Auctions in Colombia

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As a result of auctions, Colombia’s share of energy from solar and wind is expected to increase the country’s energy resilience and cultivate low-carbon development.

An auction is a competitive process for policymakers to procure electricity generated by renewable energy. This competitive, transparent process helped the Government of Colombia meet the country’s energy and climate goals and attract investment in its clean energy future.

First Renewable Energy Auction

USAID supported Colombia’s first renewable energy auction in February 2019, assessing the energy sector, drafting regulatory documents, and tailoring the auction design to Colombia’s unique needs. USAID also coordinated with Bloomberg New Energy Finance to hold events in Bogotá and New York City focused on attracting U.S. private sector developers to bid in the auction. Approximately 150 companies participated in the events, demonstrating strong commercial interest in the Colombian opportunity. USAID developed an online library to house key auction documents (in English and Spanish), rules for bidder participation, and the contracts to be awarded to winning bidders. Throughout the auction process, USAID monitored trends and innovations in global auctions and conducted study tours and workshops to help participants benefit from best practices. Despite high participation rates, the government did not award contracts because the auction’s competition criteria were not met.

Second Renewable Energy Auction

With support from USAID, the Government of Colombia conducted its second auction in 2019 which awarded contracts for seven projects that are scheduled to become operational by 2022. The second auction mobilized an estimated $1.3 billion in private capital and secured around 1.3 gigawatts of new wind and solar PV capacity with a cost of about $28 per megawatt hour (MWh). The projects will reduce greenhouse gas emissions by more than 11 million tons of carbon dioxide equivalent (tCO2e) through 2030 and create around 5,000 local construction jobs. This was a positive step toward the diversification of Colombia’s installed generation capacity, with solar photovoltaics (PV) and onshore wind shares expected to increase from less than 1 percent in 2019 to about 12 percent by 2022.

“Historical! Renewable energy auction was a success.” Standing in front of a large solar array, Colombia’s President, Iván Duque Márquez, and Energy Minister, María Fernanda Suárez, celebrate their country's renewable energy auction
“Historical! Renewable energy auction was a success.” Colombia’s President, Iván Duque Márquez (left), and Energy Minister, María Fernanda Suárez (right), celebrate the country’s October 2019 renewable energy auction, which resulted in historically low prices for energy generated from cleaner sources, and will help Colombia meet its strategic energy objectives.
Official Twitter account of the President of the Republic of Colombia

Third Renewable Energy Auction

On October 26, 2021, the Government of Colombia hosted its third renewable energy auction with support from USAID. The auction’s competitiveness increased with several companies new to the country winning projects for the first time. Contracts were awarded to 11 solar projects totaling 796.3 MW of capacity at an average price of approximately $40.56/MWh. While these prices were above the 2019 auction, they were still 15 percent below the average market price. The price increase was expected as a result of the supply chain disruptions affecting the global solar market due to the COVID-19 pandemic. The projects are estimated to mobilize an investment of approximately $875 million, with operations expected to start by 2023. The electricity generated from these plants is estimated to reduce emissions by approximately 465,000 tCO2e per year while providing about 4,700 local jobs. Colombia Minister of Mines and Energy Diego Mesa publicly expressed appreciation for USAID’s support on October 28, 2021.

For More Information

Inspection engineers standing on top of a wind turbine
USAID is helping Colombia diversify its energy mix with renewable energy while combating climate change, lowering electricity costs, creating local jobs, and promoting gender equality in the energy sector.
© Pugun & Photo Studio / Adobe Stock

2018–ONGOING, COLOMBIA – USAID is helping Colombia diversify its energy mix with renewable energy while combating climate change, lowering electricity costs, creating local jobs, and promoting gender equality in the energy sector.

USAID Colombia

USAID supports government and citizen efforts in Colombia to promote economic prosperity through the licit economy; improve the living conditions of victims of violence and vulnerable groups, including Afro-Colombians and indigenous peoples; promote respect for human rights and rule of law; and address climate change and environmental issues in one of the most ecologically diverse countries in the world.

Mother holding her son in nature. Wind turbines in the background.
Through the Scaling Up Renewable Energy program, USAID helps partner countries power economies with renewable energy, meet international climate commitments, and open markets to private investment and competition.
© Viktor Pravdica / Adobe Stock

2017–ONGOING, GLOBAL – USAID’s Scaling Up Renewable Energy (SURE) program helps partner countries meet bold climate commitments by accelerating their transition to more affordable, reliable, and accessible energy that spurs growth, powers health systems, and reduces emissions.

Through SURE, USAID provides a variety of services to help policymakers, utilities, and regulators plan, procure, and integrate renewable energy, modernize energy sectors, and create policies that enable sustainable energy markets to flourish. As more countries aim to achieve net-zero emissions by 2050 and reduce hazardous waste, SURE’s Innovation Fund supports clean energy technology, energy efficiency innovation, and a circular economy for renewable energy equipment.

Date 
Thursday, December 9, 2021 - 5:15pm

Last updated: June 14, 2022