Colombia's Energy and Gas Regulatory Commission (CREG) is preparing a new round of Firm Energy Obligation (OEF) auctions, as the market begins to focus not only on how much additional capacity could be contracted, but also on the conditions that will allow the allocations to be converted into new firm energy available for the system .
Sources in the sector indicate that it is a phased roadmap with three allocation processes, aimed at responding to the anticipated gap between available supply and the growth in electricity demand.
The scheme would be progressive: it would begin with an administered auction for 2027-2028 , continue with a purchase reconfiguration between 2029 and 2030 , and conclude with an expansion auction for 2030-2031. If implemented, the various mechanisms would extend the incorporation of new firm energy until 2031.
The discussion is gaining relevance in the coming years. According to calculations by Hemberth Suárez Lozano, founding partner of OGE ENERGY , the recently awarded projects already have around 9,500 MW nominal capacity committed, although that figure alone does not dispel concerns about meeting demand by 2030.
CREG itself confirmed in Circular 341 that it is in the planning, review and analysis phase of the upcoming OEF allocation auctions , without yet establishing the volumes that will be called.
In addition, the regulator's executive director, Adriana Jiménez, publicly announced that the entity is working on different mechanisms: an administered auction for 2027-2028, a purchase reconfiguration for the periods 2027-2028-2029 and a possible new expansion auction .
“Therefore, the relevant discussion is not how many MW are installed, but how much firm energy is secured,” says the founding partner of OGE ENERGY in dialogue with Energía Estratégica.
According to the calculation presented by the executive, the approximately 9500 MW committed consists of 4489 MW of new capacity allocated for 2027-2028 , another 4069.7 MW of new net effective capacity for the period between December 1, 2029 and November 30, 2030, in addition to 995 MW of solar and approximately 100 MW of batteries contracted in the long-term auction.
The nighttime void opens up space for storage
One of the points that the market will closely follow is how future OEFs can complement the results of the long-term contracting process , particularly in the ranges where the demanded energy could not be awarded.
Suárez Lozano rules out that the review opened by the CREG implies a reopening of Products 1 and 4, given that these were part of the CLPE auction of the Ministry of Mines and Energy and not of the Reliability Charge .
Product 1, the specialist recalls, was canceled because the minimum of three qualified competitors was not reached. For Product 4, meanwhile, bids were submitted for 558 MWh/day against a demand of 5990 MWh/day , so no contract was awarded. Any formal reopening of these products would require a decision from the Ministry. However, the remaining energy need could find another outlet within future Energy Efficiency Programs (OEF).
“The nighttime energy gap they left could be addressed in the OEF auctions, for example with rules for storage,” Suárez Lozano argued.
This approach aligns with one of the areas the regulator is already analyzing. The CREG indicated that, as part of the modernization of the Reliability Charge, it is studying the role of batteries and other energy storage systems , as well as mechanisms to recognize the backup and stability these technologies can provide to the National Interconnected System.
Investment: interest in solar power, but less appetite for new firm power
The existence of upcoming calls for proposals does not, in itself, guarantee a massive influx of projects. According to OGE ENERGY, investor appetite exists, although it varies significantly depending on the technology and type of backup required by the system .
“There is investor appetite, there is interest in solar energy and little in new firm contracts,” Suárez Lozano warned.
The executive is referencing the auction held in May, in which 77 plants were allocated, although only 15 were entirely new projects . Within that group, Nencol 5 was, he specifies, the only new thermal project to be allocated .
Furthermore, before the August 6 deadline, at least five of those 15 projects still did not have the required guarantees , although Suárez Lozano clarifies that he could not subsequently verify whether they finally met that requirement.
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The expert's interpretation is that the obstacles change substantially depending on the technology . In renewables, particularly solar, resource availability or developer interest are not the only determining factors.
“In solar energy, the bottleneck is execution: licenses, connection, transmission and financing can add years to the calendar,” says the founding partner of OGE ENERGY.
Specifically, Circular 341 shows that CREG is seeking a more detailed picture of the pipeline. The agency requested information from developers and generators regarding the status of projects, generation source, capacity in MW, connection point, environmental license, and probable completion and energy delivery dates .
For technologies capable of providing greater stability, the equation is different. Remuneration and fuel availability become more important factors when defining an investment.
“In thermal power and storage, the problem is remuneration, with closing prices of $22 and $16.4/MWh, in addition to the availability of gas,” Suárez Lozano indicated.
The specialist also incorporates a factor common to all technologies: the predictability of rules and regulatory timelines . "Regulatory instability also weighs heavily on all of them, because postponing schedules affects financial closing and market confidence," he stated.
Therefore, for OGE ENERGY, the challenge of the upcoming auctions is not solely about defining a new volume of MW, but about building conditions that allow developers to move towards an effective investment decision and subsequently meet the entry schedules .
“For the projects to reach the investment decision stage, five changes would be needed. The first is stable rules and timelines once the auction is called. This is followed by specific remuneration for nighttime firmness and storage, and coordination between the allocation of OEF (Operational Energy Efficiency) and transmission works,” Suárez Lozano stated.
Added to this is the need for certainty regarding gas supply and guarantees proportionate to the risk so as not to exclude medium-sized developers.
Thus, while CREG moves forward with designing the next mechanisms, the sectoral debate is shifting from the volume of new capacity to the effective capacity of that expansion to provide firmness when the system needs it . In this scenario, nighttime coverage, storage, transmission, and investment signals are among the issues that must be resolved so that future allocations translate into available energy within the planned timeframes.
Auctions, BESS and new contracts arrive at FES Colombia
This scenario will be one of the central themes of the Future Energy Summit (FES) Colombia , which will take place on October 1st at the JW Marriott Hotel in Bogotá .
The meeting comes after a new market movement, with the contracting of 995 MW of solar and 100 MW associated with storage , in addition to the Reliability Charge auction that awarded nearly 1.8 GW of new renewable capacity with contracts of up to 20 years .
The processes also left unawarded capacity and projects ready to compete, so the continuity of the calls for proposals is beginning to occupy a central place within the sectoral discussion.
Companies such as Isagen, CATL, Terpel, Sungrow, SolaX Power, JinkoSolar, GameChange Solar, ISA Energía, Promigas, PV Hardware and Atlas Renewable Energy will discuss the country's renewable future.
Marsh, Nexans, Patria Investments, AFRY, Atera, Skysense, Alurack, TCL, CTG Latam, Vatia, Gotion, Yingli Solar, JA Solar and ERCO , among other companies, will also participate.
Towards the end, a panel with government representatives will address Colombia's energy priorities towards 2030, at a time when the country must define not only how much it wants to contract, but what signals it needs to offer to turn those future auctions into new firm energy available for the system .