A river runs through it: Hydroelectric resources provide a vast supply of clean energy

In Colombia, like its neighbours Brazil and Peru, the use of hydroelectric power as the primary source of electricity has been a crucial aspect in expanding supply capacities to meet rising demand over the past half century. Indeed, in 2012 Colombia derived 68% of its 14,420-MW supply capacity from its vast network of rivers and streams, according to the National Office of Mining and Energy Planning (Unidad de Planeación Minero Energética, UPME). With several notable projects being constructed that could double the current hydroelectric capacity in the next eight years, reliance on water resources for the majority of generation capacity will likely continue well into the future. Even so, hydroelectricity’s role in electricity generation has actually diminished in recent years as thermal resources, in the form of natural gas and coal, have taken on increased roles in supplying the national grid.

MAJOR DEVELOPMENTS: At a cost of some $3bn, the Ituango dam and hydroelectric plant is set to be the largest power generating facility in the country when it comes on-line in 2018. With a capacity to produce 2400 MW, the facility will add nearly 15% to 2012 generation supply capacity. Ituango is located on the Cauca River in the northern department of Antioquia, whose government, along with utility firm Empresas Publicas de Medellín (EPM), is managing the development of the project. The 220-metre dam, which will handle volumes of 20m cu metres of water, will also flood 3800 ha of land. French infrastructure firm Alstom will provide the eight 300-MW turbines that will power the hydroelectric plant, with the first four coming on-line in 2018 and the second set expected in 2021. The second-largest hydroelectric project being constructed is the $1.74bn Sogamoso, which is being developed by Isagen in Santander. Sogamoso, which derives its name from the river on which it is being constructed, will bring another 820 MW to the national grid when it becomes commercially operational in the fourth quarter of 2013. Several other medium-sized projects are also slated for completion in the near future, including the 420-MW El Quimbo plant being developed by Emgesa, a subsidiary of Spain’s Endesa. El Quimbo is an $840m, 151-metre hydroelectric dam being constructed on the Magdalena River that is slated to open in November 2014. Finally, Celsia’s 352-MW Porvenir II, built on the Samara River, will be operational in 2017.

LESS IS MORE: While larger hydroelectric projects of more than 300 MW are certainly common, recently many private companies have found the proposition of establishing smaller hydroelectric facilities particularly interesting. This is primarily due to the prioritisation of grid access to small and mediumsized hydroelectric facilities. Many such facilities are currently being established such as the 20-MW Borroso facility, developed by HMV Energy that came online in September 2012, according to information from UPME. HMV has another 20-MW plant coming on-line in El Popal in December 2013, while Isagen’s 78-MW Amoya and EPSA’s 60-MW Cucuana are expected to start in the first half of 2013.

Additionally, a 45-MW facility constructed by Energia de los Andes on the Ambeima River will begin operation in December 2013, while Hidralpor’s 78-MW Carlos Lleras Restrepo hydroelectric plant will become commercially operational one year later in December 2014. In addition to the numerous existing hydroelectric plants of less than 100 MW, 301 MW worth of total capacity from small hydro facilities will come on-line in 2013 and 2014, expanding current supply capacity by 2.1%.

EXPORT POTENTIAL: Colombia’s total viable hydroelectric resources are five times greater than current capacities, a fact which bodes well not only for the long-term energy security but also for its potential to become a serious energy exporter in the future. Unlike the finite nature of coal, oil and gas, the renewable aspect of hydroelectric resources means the country can safely export electricity in the short to medium term without severely impacting its longer-term energy security. Colombia has already been exporting small amounts of electricity to Ecuador since 2003. Lucio Rubio, the director general of Endesa, told OBG, “Colombia has energy surpluses without considering ongoing hydroelectric projects and the untapped potential of renewable energies. There is a very strong possibility of exporting energy, particularly once the northern interconnection with Panama is completed.” Meanwhile, Luis Fernando Alarcón, the general manager of ISA, told OBG, "Opportunities for Colombia to export electric energy are limited but exist. To date, the only international connection that works properly is the Ecuador-Colombia one, thanks to its clear regulation. The country is now willing to conclude the interconnection between Colombia and Panama, in order to provide electrical energy to all Central America.”

A 600-km, $420m transmission line is currently being constructed by state-owned transmission company ISA. With an initial capacity of 300 MW, and the potential to extend this to 600 MW, the completed interconnection is expected to host the first power transactions between Panama and Colombia by 2015. Two auctions for the rights to the transmission lines have been postponed, most recently in August 2012, with a new auction likely to happen in 2013. Not only does the interconnection open up electricity generators to the potential to export power to Panama, but given the development of an 1800-km, 300-MW interconnection running throughout Central America (known as SIEPAC), in the long term Colombia would have access to a second market of roughly equivalent size which is increasingly reliant on thermal resources, and thus subject to fluctuations in the international commodity market.

Other opportunities for the exportation of electricity could result from regional interconnections within South America. “While the plan to connect Colombia and Panama is already under way, interconnection plans to link the Andean nations of Peru, Ecuador, Chile and Colombia to a single grid, as is being done in Central America, could also propel Colombia to become a major exporter to neighbouring Andean countries.” Juan Jorge Celis Neira, president of Alstom Colombia, told OBG. EL NIÑO: While the utilisation of hydraulic resources has provided Colombia with a relatively stable, renewable and affordable source of power generation, it also entails inherent risks given the climate patterns in the region. Colombia is affected by weather patterns such as El Niño which cause extreme weather across the Americas. El Niño, which is caused by abnormally warm water temperatures in the Pacific Ocean off the coast of South America, typically causes warmer and wetter weather patterns in countries such as Peru and Ecuador, leading to abundant precipitation and flooding. However, in Colombia El Niño causes warmer temperatures and lower precipitation rates, causing droughts that can affect agriculture, water utilities and hydroelectric power.

Some of the most severe droughts brought on by El Niño occurred in 1992 and 1997 and led to forest fires and water and energy rationing, resulting in decreased hydroelectric capacity. A less severe occurrence of El Niño took place in 2006. Its dramatic effects on electricity generation actually prompted the increase in thermal generation over the past 15 years. The inclusion of coal- and natural-gas-fired thermoelectric generation facilities has provided much needed diversification to the national grid and lessened the dependence on hydroelectric resources. As a result of this diversification and with the universal expansion of generation facilities, the national grid currently has enough reserves to handle a hypothetical repeat of the 1990s droughts, though with severe weather patterns becoming more frequent and more severe all over the world, nothing is certain.

SECURITY: The remote locations of many hydroelectric facilities have also made them a target for attack by the Revolutionary Armed Forces of Colombia, which has in the past destroyed electric infrastructure in the countryside. Thermal facilities, despite at times relying on the transportation of coal and natural gas resources, often through equally remote areas, are generally less prone to attack due to their ability to be located just about anywhere in the country.

The UPME calculated that Colombia possesses 93,000-MW worth of hydroelectric resources – and that includes only projects of more than 100 MW. Of that 93,000 MW it also estimates that 79,000 MW are environmentally safe to develop, indicating that Colombia has yet to develop one-fifth of its hydroelectric potential. With such vast resources and a growing economy, investment into the development of hydroelectric projects of all sizes will assuredly continue to be the main focus of development to ensure sufficient supply to the national grid and potentially exporting to nearby countries.

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The Report: Colombia 2013

Energy & Utilities chapter from The Report: Colombia 2013

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