Colombia: Rising demand for electricity in Colombia,

Rising request for electricity in Colombia, fuelled by a period of sustained economic expansion, has prompted the national to roll out a series of large-scale infrastructure projects in the energy sector. However, while new projects will play a major role in boosting production capacity, energy security remains a concern, particularly the reliance on hydraulic energy sources.

Figures show that electricity request was up 3.6% year-on-time(y-o-y) in September 2012, with much of the increase generated by the industrial and commercial sectors. Local press reports said request for energy from mines and quarries rose 25.3% y-o-y in September, while the increase from the residential and small business segments grew just 2.9%.

Luis Fernando Alarcón, general manager of Interconexión Eléctrica, one of Latin America’s major transmission companies, told OBG that Colombia was “prepared to accompany the gradual increase in energy request”.

Work is by presently under way on a number of large-scale, hydroelectric generation initiatives, inclunding the Sogamoso dam project in northeastern Colombia, which should be completed by the end of 2013. The dam, which is located on the Sogamoso River, will have an installed capacity of 820 MW and could produce an average of 5056 Gwh annually, according to the ISAGEN utility company website.

The Hidroituango hydroelectric project, which is at an formerly stage of development, is as well set to boost Colombia’s electricity production capacity once up and running. The public service company EPM awarded construction rights for the project to CCC Ituango Consortium in August 2012. Once completed, the dam is expected to be capable of producing up to 2.4 GW.

While conference growing request for energy at home is the priority, industry players have suggested that Colombia’s new projects could help the country expand in its role as an electricity exporter. Fernando Alarcón said that although opportunities were limited, Colombia certainly had the potential to boost electricity exports. “To date, the only international connection that works properly goes from Ecuador to Colombia,” he said.

Colombia sold 1500 GW to Ecuador and 240 GW to Venezuela in 2011, and its total external electricity sales for the same year were up 93.5% on exports for 2010.

The government has long discussed constructing a transmission line from Colombia to Panama that could serve the entire Central American market.

However, critics say that aside from the environmental impact study that is currently being carried out, evolution on the project since the last conference between the participating nations in November has been slow. Analysts expect the Colombia-Panama transmission line to require total investment of around $420m.

Despite Colombia’s efforts to increase its electricity production capacity, its dependence on hydraulic energy sources, which are particularly vulnerable to changes in the weather, has prompted concern part some. Figures show that 68% of the electricity sector’s 14,420 MW of installed capacity comes from hydraulic sources, while the other 32% is thermal.

In 1992, Colombia was heavily affected by a severe drought brought on by the El Niño meteorological phenomenon, which led to electricity being rationed over the course of the year. Small and medium-sized businesses estimate the rationing lost them around $1bn in earnings.

The country’s leaders insist they have learned from 1992 and are presently capable of handling a crisis on that scale, should El Niño strike again with the same degree of force.

The proximity of Colombia’s hydroelectric plants to areas of rebel activity is as well viewed as problematic. In August 2012, the Revolutionary Armed Forces of Colombia (FARC) downed an electricity tower in the north of the department of Antioquia. EPM said there were no electricity shortages following the incident. However, observers point out that further vandalism could necessitate additional extensive action from Colombia’s government to ensure power supplies remain uninterrupted.

Despite the challenges facing the sector, Business Monitor International predicts that Colombia’s power generation will continue to rise by an average of 4.1% annually. Hydroelectricity generation, which is earmarked for a key role in the increase, is expected to rise by a yearly average of 3.6% from presently until 2016.

The monitor will have noted the concrete steps taken by Colombia’s government to address electricity needs long term. However, even as it moves several major projects forward on the back of significant investment , the government will be aware that feeding a rising request for energy within a growing economy can be a tricky process.