Electricity Sector in Colombia

Electricity Sector In Colombia

The electricity sector in Colombia is dominated by large hydropower generation (65%) and thermal generation (35%). Despite the country’s large potential in new renewable energy technologies (mainly wind, solar and biomass), this potential has been barely tapped. A 2001 law designed to promote alternative energies lacks certain key provisions to achieve this objective, such as feed-in tariffs, and has had little impact so far. Large hydropower and thermal plants dominate the current expansion plans. The construction of a transmission line with Panama, which will link Colombia with Central America, is underway.

An interesting characteristic of the Colombian electricity sector (as well as of its water sector) is a system of cross-subsidies from users living in areas considered as being relatively affluent, and from users consuming higher amounts of electricity, to those living in areas considered as being poor and to those who use less electricity.

The electricity sector has been unbundled into generation, transmission, distribution and commercialization since sector reforms carried out in 1994. About half the generation capacity is privately owned. Private participation in electricity distribution is much lower.