Colombia concluded the first day of its long-term electricity supply auction with the allocation of Product 3 , corresponding to new renewable energy plants incorporating storage systems. The round awarded 370 MW of capacity , distributed between 270 MW of solar and approximately 100 MW of battery storage, within contracts equivalent to 390 MWh/day of energy. The distinction between these two figures is key: the 370 MW represents the installed capacity of the awarded power plants and storage systems, while the 390 MWh/day corresponds to the energy contracted daily through the mechanism.
The closing price reported for this first round was 315.87 Colombian pesos per kWh . Regulations stipulate that the contractual value corresponds to the price offered by each seller, expressed in pesos per kilowatt-hour, plus the CERE component defined by current regulations.
According to the Ministry of Mines and Energy, the price obtained is equivalent to less than 30% of the energy costs currently faced by consumers on the wholesale market during drought periods . The government presents this difference as a sign of the potential of long-term contracts to reduce demand exposure to spot market volatility.
The auction will continue on July 29 with a second round of bidding , in which products corresponding to new photovoltaic solar plants and existing projects incorporating storage systems will be allocated. On that day, the Colombian Mercantile Exchange will publish bulletins with the results for each category. According to the updated schedule, Product 2 will receive bids for prices and quantities between 8:00 and 9:30 a.m. on July 29, with results expected to be published at 11:30 a.m. Product 4 will be awarded in the afternoon: bids will be submitted between 2:00 and 3:30 p.m., and the corresponding bulletin will be released at 5:30 p.m. The audited and final balance of the process will be released on July 30 , once all stages of the mechanism have been completed.
The Colombian Mercantile Exchange acts as the auctioneer and publishes partial results after each round. However, these bulletins alone do not constitute the complete closing of the bidding process, as the auditor's review, the competition conditions, and the final process report must be consolidated subsequently.
The energy allocated in this first round would be enough to supply more than 67,000 homes during peak electricity demand. The contracts will have a duration of 15 years, and for those contracts with an initial date in 2030, the obligations will begin on January 1 of that year.
“ The results obtained on this first day of the auction mark a milestone for the country’s just energy transition ,” says Edwin Palma, Colombia’s Minister of Mines and Energy .
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The official maintains that “ multiplying energy storage capacity and incorporating more solar generation sources into the energy matrix reaffirms the commitment of the Government of Change to decarbonization and the reliability of the electrical system .”
The award also represents the first long-term contracting mechanism in Colombia to incorporate hybrid battery projects . The allocated capacity would increase the current storage capacity of the national electricity system by approximately 1,000% , according to the Ministry of Energy.
The auction was designed against a backdrop of concerns about contractual demand coverage. Official projections identified a structural risk from 2027 onwards, with increased pressure towards 2030 , due to the reduction in contracted energy compared to expected consumption and the consequent increase in exposure to the stock market.
The outcome also gains significance in light of the doubts that surrounded the previous stage. Although the initial registration attracted 43 interested parties , various market players warned about the limited number of energy companies among the potential bidders and about the requirement for guarantees to proceed with the award.
The final version of the schedule extended the deadlines for correcting deficiencies in the bid security and providing proof of payment of participation fees. Addendum No. 8 allowed for these requirements to be corrected until July 22 and 23, respectively, before the publication of the list of eligible participants.
Guarantees remain a central element for implementation. Once the agreements are signed, sellers and buyers must provide performance and payment guarantees to the central administrator, while the projects involved will have to demonstrate compliance with their obligations related to their commissioning date.
Contract formalization will come later. Addendum No. 8 sets November 30, 2026, as the date for signing the long-term contracts and the mandate with the centralized administrator. Before then, the awarded projects must provide the Commercial Exchange System Administrator with the guarantees related to the commissioning date.
The implementation of these commitments will also be affected by a change in administration. It's worth noting that Abelardo de la Espriella will assume the Presidency of Colombia on August 7th, while María Nohemí Arboleda has been appointed as the new Minister of Mines and Energy. The incoming government will thus inherit a completed auction, but with the challenge of overseeing the signing of contracts, the establishment of guarantees, and the development of the projects that are expected to begin supplying energy by 2030.