Colombia enacts energy transition law

Colombia has a enacted an energy transition law to promote investment in hydrogen, renewable energy and sustainable transport.

The law, signed by President Ivan Duque yesterday, recognizes green and blue hydrogen as renewable energy eligible for reduced income tax, VAT and tariff exemptions and accelerated depreciation. The new legislation also provides a legal framework for other energy sources such as geothermal plants, as well as storage, carbon capture and energy efficiency.

Colombia was a latecomer to renewable energy compared with other Latin American countries such as Brazil, Uruguay and Chile, in part because of its heavily reliance on hydroelectricity rather than thermoelectric plants. But Bogota is slowly starting to close the gap with new projects, such as the 9.8MW El Carmelo solar park just inaugurated by Colombian generator Celsia. About half of the energy from the new plant will supply Cargill's local poultry operations.

Colombia is holding a third renewable power auction on 31 October for 15-year power purchase agreements starting on 1 January 2023.

The country has a total of 2.5GW of unconventional renewable energy already installed or scheduled to come on line by August 2022.

In a related announcement last week, Colombia has begun the process of joining the IEA.

Despite strides toward energy transition, Colombia still derives most of its revenue from oil and coal production and exports.

By Patricia Garip