Home » Key Industries » energy


  • The Colombian electricity sector consists of public and private companies. Deregulation in the 1990s allowed for private investment and established a wholesale electricity market. Colombia has public policies and a regulatory, institutional, and market framework that has promoted and facilitated the diversification of the energy matrix. The energy transition is a push towards to develop the country’s non-hydroelectric power capacity, which has attracted new investments in wind and solar power projects, as well as the transmission infrastructure necessary to support its development and guarantee universal access to it.
  • According to the World Economic Forum, Colombia is the 3rd country in Latin America in the Energy Transition Index 2021, surpassing Brazil, and Chile. In the world, Colombia ranked in the 29th position among 115 countries.
  • Colombia has a significant energy potential, with power generation from non-conventional renewable sources, due to the availability of energy resources such as:
    • Sun: Average daily radiation 60% higher than the world average (4.5 KWH/ M2).
    • Onshore Wind: The wind power generation potential for the implementation of wind plants is more than 50GW, among the highest in Latin America, according to the World Bank's Energy Sector. In La Guajira, Colombia has a wind speed of 9 m/s, double than the world average.
    • Offshore Wind: Wind speeds in the Caribbean coast of Colombia, particularly in La Guajira region, consistently exceed 10 m/s. Estimated Net Capacity Factors NCF) approach 70% - particularly in the east of La Guajira - and are among the highest in the world. The wind power generation potential for the implementation of wind plants is 50GW.
    • Biomass: According to the Mining and Energy Planning Unit UPME, the country's energy potential from biomass is enough to supply 46% of national energy demand.
    • Water: More than 740.000 watersheds and a multiannual flow of 52 m3/s position Colombia in the top 10 countries that concentrate 46% of the water supply and the installed capacity potential is 65 GW.
  • Green hydrogen is an alternative for Colombia's energy future. With the support of the Interamerican Development Bank IDB and the UK Government the Colombia´s hydrogen roadmap, was launched on September 30th, 2021. A potential of electrolysis plants with an installed capacity between 1 to 3 GW by 2030 was identified in this roadmap. Colombia is expected to have the 4th lowest green hydrogen production costs in 2050 ranging between roughly $0.8/ kgH2 and $1.2/kgH2. (IRENA, 2022).

    In 2022, 2 first hydrogen pilot projects in the country started operations:

    • Ecopetrol installed a 50-kW proton exchange membrane PEM, electrolyser and 270 solar panels at its refinery to turn industrial waters from the facility into high-purity green hydrogen. Production: 20 kg/day in the next 3 months. Location: Cartagena.
    • Promigas will use its electrolyser, a 137-kW solar farm and water from the Cartagena aqueduct network to produce green hydrogen to inject it into the natural gas grid for blending purposes. Production: 1,574 kg/year, 5th phase ~15 ton/year. Location: Cartagena
  • To foster the development of renewable energies, Colombia has several regulatory and tax incentives such as the deduction of 50% of the income tax for 15 years for investments in alternative sources; an income tax exemption for the sale of NCRE by the generator; an exclusion of Tariff and VAT for the importation of equipment for the development of NCRE generation projects; the automatic exclusion of VAT in the acquisition of solar panels and equipment for solar generation.
  • There are 270 renewable energy generation projects registered before UPME at stages I (Pre-feasibility) and II (Feasibility), with an installed capacity of 18,177.76 MW. (Solar: 9.967.83 MW, 213 Projects; Wind: 3.075.6 MW, 18 Projects; Offshore Wind: 4,835 MW, 7 Projects; Small Hydropower Plants SHPs 293.47, 30 Projects; Biomass: 5.86 MW, 2 projects). The effective capacity of power generation in 2021 was 17.761.67 MW, of which 11.043 MW (62.17%) was produced with water resources, 5,295 MW (29.81%) with thermal resources, and the 8.2% remaining with smaller, cogenerated, and self-generation plants.
  • The Mining and Energy Planning Unit UPME launched the 2020-2034 Expansion Plan in which 8 works were proposed to strengthen the national electricity system and will be carried out via public call or expansions of the current network operators. In the first semester of 2022, UPME announced an addition to the 2020-2034 expansion plan that will include new transmission works.
  • The National Interconnected System connects 47% of the national territory and covers 97% of the population. The non-interconnected areas represent the remaining 53%, a total of 18 departments, 1.769 localities and 440.000 people. Currently, these areas produce energy mainly with diesel. There are investment opportunities for foreign investors interested in providing clean energy solutions in these areas of the country.