VZCZCXYZ0001
PP RUEHWEB

DE RUEHBO #4086/01 3171716
ZNR UUUUU ZZH
P 121716Z NOV 08
FM AMEMBASSY BOGOTA
TO SECSTATE WASHDC PRIORITY 5545

UNCLAS BOGOTA 004086 
 
SIPDIS 
 
EEB/IFD/OIA FOR MCULLINANE; WHA/EPSC FOR FCORNIELLE; 
OES/STC FOR TBURNS; STATE PASS TO OPIC 
 
E.O. 12958: N/A 
TAGS: ENRG EINV SENV PGOV OPIC CO
SUBJECT: COLOMBIA: INFORMATION FOR RENEWABLE ENERGY 
INITIATIVES 
 
REF: STATE 100170 
 
¶1. SUMMARY: The following information on Colombia's energy 
sector is provided in response to reftel request.  Colombia 
is working to expand its renewable energy output and offers 
extensive opportunities for increased investment in wind, 
solar, geothermal, biomass/biofuels, and hydroelectric 
projects.  In September, the United States and Colombia 
signed a memorandum of understanding to advance bilateral 
cooperation on renewable and clean energy, including 
biofuels, which provides a framework for increased 
cooperation. END SUMMARY. 
 
Overview 
-------- 
 
¶2. Despite a decline in domestic petroleum production since 
the late 1990s, Colombia remains a net energy exporter and 
expects to increase both traditional and renewable energy 
output over the next decade.  Colombia attracted over USD 3.3 
billion in foreign direct investment to its energy sector in 
¶2007.  While most of the investment flowed to the oil, gas 
and coal sectors, renewable energy offers promising 
opportunities.  Currently, Colombia has only 28.1 megawatts 
(MW) of installed renewable energy capacity, excluding 
hydropower, consisting mainly of wind power.  Nevertheless, 
Colombia has significant wind, geothermal, biofuels, and 
solar resources that remain largely unexploited. 
 
Wind Energy 
----------- 
¶3. Colombia has an estimated wind power potential of 21 
gigawatts (GW) in the northern department of La Guajira, 
which is home to class 7 winds (i.e. over 10 meters per 
second).  Only the Patagonia region of Chile and Argentina 
offers that class of wind capacity elsewhere in Latin 
America.  At present, Colombia's installed wind capacity 
totals only 19.5 MW or 0.4 percent of total wind potential. 
The capacity is concentrated in the Jepirachi Wind Project, 
developed by the Medellin Public Utility (EPM) company under 
a carbon finance mechanism arranged by the World Bank. 
However, several projects are under consideration, including 
a potential 200 MW project in Ipapure. 
 
Solar 
----- 
 
¶4.  Colombia has significant solar capacity due to its 
location near the equator.  However, Andean climatic 
conditions  limit ideal collection areas.  Average daily 
radiation totals 4.5 kilowatt hours per square meter (kWh/m2) 
with the highest averages (6 kWh/m2) registered in the 
Guajira peninsula. Of the 6 MW of installed solar power in 
Colombia, 57 percent is used in rural electrification 
applications and the remainder in communications towers and 
road signals. 
 
Geothermal 
---------- 
 
¶5.  The Colombian Electric Power Institute (IPSE) has 
identified three areas of Colombia with strong geothermal 
power potential: near the Azufral volcano, Narino Department; 
near the Chiles volcano, Narino Department; and Paipa, Boyaca 
Department.  While geothermal power is still only in the 
exploratory stage, the U.S. Trade and Development Agency 
(USTDA) has funded a USD 599,000 feasibility study to support 
the development of a 50 MW geothermal power generation 
project with Colombia's state-owned power generation company 
ISAGEN. 
 
Biomass/Biofuels 
---------------- 
 
¶6. Colombia has significant biomass power generation 
potential based on agricultural waste from large industries 
including bananas, coffee, and livestock.  The Colombian 
government estimates potential capacity at 16 GW.  The Uraba 
region of Antioquia Department, with 19,000 hectares of 
banana plantations producing more than 1 million tons of 
biomass annually, as well as Colombia's coffee growing region 
are the most promising areas for biomass-fueled electrical 
generation. 
 
¶7. The GOC has implemented an aggressive national biofuels 
development plan.  Colombia currently has five privately 
owned ethanol plants and is scheduled to have six operational 
private biodiesel plants by mid-2009. The GOC has 
aggressively pursued biofuels as a means of reducing 
pollution in major metropolitan areas, generating rural 
 
employment alternatives to narcotics cultivation, and 
diversifying its transportation fuel supply.  Specifically, 
the GOC has implemented a series of tax incentives and 
blending mandates of renewable biodiesel (5 percent) and 
ethanol (10 percent) into diesel and gasoline transportation 
fuel supplies to support the industry.  Although Colombia is 
still working to meet the existing blending requirements, the 
mandates are scheduled to rise to 20 percent by 2015, further 
increasing biofuels demand. The GOC has also publicly pledged 
to develop the industry without destruction of native 
ecosystems through use of degraded or underutilized 
agricultural lands already in production. 
 
Hydroelectric 
------------- 
 
¶8.  According to GOC figures, hydroelectric power currently 
accounts for 78 percent of Colombia's electricity generation 
(13,600 MW) with almost 3,000 MW of additional capacity under 
construction through six new plants scheduled for completion 
by 2018.  The new plants, located in Tolima, Huila, 
Antioquia, Caldas and Santander Departments, represent USD 5 
billion in investment and will be built and operated by Grupo 
Endesa (Spain), Union Fenosa (Spain), ISAGEN 
(Colombia-Public/Private), and EPM (Colombia-Public).  In 
addition to supplying rising domestic demand with 
emissions-neutral renewable hydroelectric power, Colombia 
aims to sell excess capacity to regional neighbors including 
Brazil.  Colombia currently exports a small amount of 
electricity to Ecuador. 
 
¶9.  The GOC estimates total large-scale hydroelectric 
potential in Colombia to reach 93 GW with an additional 25 GW 
of small-scale hydroelectric plant potential.  However, the 
potential for large hydropower faces challenges as the best 
sites have been developed, increasing environmental and 
social displacement concerns, and climate changes affecting 
rainfall. 
 
Memorandum of Understanding 
--------------------------- 
 
¶10. On September 18, 2008, Secretary Rice signed a memorandum 
of understanding with Colombian Foreign Minister Bermudez to 
advance cooperation on renewable energy by promoting research 
exchange, alternative development activities, investment in 
clean energy, and the alignment of biofuels standards and 
codes.  To date, State Department and U.S. Department of 
Agriculture funds have supported exchanges of experts on 
sustainable biofuels development and Colombia has joined the 
Global Bioenergy Partnership (GBEP) to share its experiences 
in developing renewable energy. 
 
Points of Contact 
----------------- 
 
¶11. Primary Embassy point of contact is Deputy Economic 
Counselor William Popp (poppww@state.gov; tel: 
011-571-383-2780).  Back-up point of contact is Economic 
Counselor Lawrence Gumbiner (gumbinerlj@state.gov; tel 
011-571-383-2448) 
BROWNFIELD