October 23 (Renewables Now) - Colombia on Tuesday successfully granted long-term off-take contracts to 1,298 MW of new wind and solar capacity in the second attempt to hold a renewable energy auction.
In total, bids for five wind and three solar projects from seven generators were paired with 22 power retailers, the Colombian mining and energy ministry announced without naming the winners.
The auction concluded with a weighted average price of COP 95.65/kWh (USD 0.028/kWh/EUR 0.025/kWh) for 10,186 MWh per day, representing a close to COP-50 discount over the average cost of generation appearing in current power purchase agreements (PPAs), the ministry noted.
Since the ministry’s target demand of 12,050.5 MWh per day was not met, the auction process will continue today to settle the remaining 1,864.5 MWh per day. It is expected that the maximum price for offers to sell will fetch COP 110/kWh.
The winners are entitled to the so-called “take-or-pay” contracts, meaning that off-takers have to pay generators a fixed contracted amount regardless of whether or not the electricity is consumed. The generators also obligated to supply a fixed amount of energy to the buyer during the assigned time block.
Power generators have to start meeting their 15-year contractual obligations on January 1, 2022.
In a separate statement, Colombian president Ivan Duque called the auction a resounding success saying that in 14 months the country would move from less than 60 MW of installed renewable energy capacity to more than 2,250 MW, surpassing the government target of 1,500 MW.
The new projects will bring an investment of USD 2.2 billion (EUR 1.98bn) to the hydro-dependent country.
(COP 1,000 = USD 0.291/EUR 0.262)
(USD 1.0 = EUR 0.90)