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How capacity mechanisms drive technology choice in power generation: The case of Colombia

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  • Olaya, Yris
  • Arango-Aramburo, Santiago
  • Larsen, Erik R.

Abstract

Colombia enacted its first legal framework for promoting alternative energies in 2001 and a second framework in 2014. Since the generation technology mix has not changed since 2000, there is a need to understand how regulation and market structure affect the adoption of technologies. In this paper we address the question of what has been the impact of the capacity mechanisms adopted during the 2000s on technology choices for power generation in Colombia. Our approach is to analyze the evolution of market structure and regulation. We found that regulatory uncertainty and low prices drove a surge of small hydro plants during the 2000s. During the 2010s, the new regulatory focus on reliability of supply has resulted in increased coal-fueled generation and large hydro. This increased reliance on hydro power can further delay the entry of renewable technologies and the diversification of the Colombian portfolio.

Suggested Citation

  • Olaya, Yris & Arango-Aramburo, Santiago & Larsen, Erik R., 2016. "How capacity mechanisms drive technology choice in power generation: The case of Colombia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 563-571.
    • Handle: RePEc:eee:rensus:v:56:y:2016:i:c:p:563-571
    DOI: 10.1016/j.rser.2015.11.065
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    4. Rafael Peña Gallardo & Adalberto Ospino Castro & Aurelio Medina Ríos, 2020. "An Image Processing-Based Method to Assess the Monthly Energetic Complementarity of Solar and Wind Energy in Colombia," Energies, MDPI, vol. 13(5), pages 1-17, February.
    5. Pablo David Necoechea-Porras & Asunción López & Juan Carlos Salazar-Elena, 2021. "Deregulation in the Energy Sector and Its Economic Effects on the Power Sector: A Literature Review," Sustainability, MDPI, vol. 13(6), pages 1-23, March.
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    7. Henao, Felipe & Rodriguez, Yeny & Viteri, Juan Pablo & Dyner, Isaac, 2019. "Optimising the insertion of renewables in the Colombian power sector," Renewable Energy, Elsevier, vol. 132(C), pages 81-92.
    8. Ramirez, Jacobo & Angelino Velázquez, Diego & Vélez-Zapata, Claudia, 2022. "The potential role of peace, justice, and strong institutions in Colombia's areas of limited statehood for energy diversification towards governance in energy democracy," Energy Policy, Elsevier, vol. 168(C).
    9. Arango-Aramburo, S. & Ríos-Ocampo, J.P. & Larsen, E.R., 2020. "Examining the decreasing share of renewable energy amid growing thermal capacity: The case of South America," Renewable and Sustainable Energy Reviews, Elsevier, vol. 119(C).
    10. Gallego, Camilo A., 2022. "Intertemporal effects of imperfect competition through forward contracts in wholesale electricity markets," Energy Economics, Elsevier, vol. 107(C).
    11. Gómez-Navarro, Tomás & Ribó-Pérez, David, 2018. "Assessing the obstacles to the participation of renewable energy sources in the electricity market of Colombia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 90(C), pages 131-141.
    12. Henao, Felipe & Dyner, Isaac, 2020. "Renewables in the optimal expansion of colombian power considering the Hidroituango crisis," Renewable Energy, Elsevier, vol. 158(C), pages 612-627.

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