MinMinas enacted a decree project for the development of FNCER | Lawyers in Colombia Brigard & Urrutia MinMinas enacted a decree project for the development of FNCER

Brigard & Urrutia

MinMinas enacted a decree project for the development of FNCER

Tue, 01/16/2018 - 09:59
NewsFlash: 400 

Infrastructure and Public Utilities

Subasta de hidroeléctricas Hidroarma

The Ministry of Mines and Energy enacted a decree project for the development of generation projects with unconventional sources of renewable energy

In development of Law 1715 of 2014, "By means of which regulates the integration of non-conventional renewable energies to the National Energy System", the Ministry of Mines and Energy (the "Ministry") enacted for presidential approval the decree project "Whereby the Regulatory Decree of the Mining and Energy Administrative Sector, 1073 of 2015, is added, in relation to public policy guidelines for the long-term contracting of generation projects with non-conventional sources of renewable energy and other provisions are dictated."

To promote and encourage the development of the electricity generation activity through non-conventional sources of renewable energy (FNCER) such as solar, wind and biomass, the Ministry has decided to add a new section to the Regulatory Decree of the Administrative Sector of Mines and Energy, 1073 of 2015. What is expected to be the new Section 7 of Chapter VIII of Title III, related to the Promotion, Development and Use of Non-Conventional Energy Sources (FNCE), would provide the guidelines to define a mechanism for the long-term contracting of generation projects with FNCER. To this extent, the decree would not establish what is expected to be the mechanism that will allow the integration of the aforementioned sources of renewable generation, but would determine only the criteria to be followed by the Ministry itself or by the entity that the latter delegates, to define the final mechanism that meets the objectives described in the decree project.

Within the scope of these new regulatory policy guidelines, the following most relevant aspects are identified:  

  • The long-term contracting mechanism will apply both to the agents of the Wholesale Energy Market (MEM as for its acronym in Spanish) and to the non-regulated users of the electric power service.
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  • The long-term contracting mechanism should involve the following aspects:
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    1. Competitive allocation scheme
    2.  
    3. Definition, volume and term of the product that will be assigned
    4.  
    5. Periodicity of its application
    6.  
    7. Scheme of guarantees and responsibilities of the participants
    8.  
    9. Entity responsible for its implementation
     
  • The mechanism will apply to FNCER projects, regardless of their size or technology.
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  • The mechanism should seek to reduce emissions of Greenhouse Gases (GEI as for its acronym in Spanish) from the electricity generation sector, within the framework of the commitments acquired by Colombia at the United Nations Climate Change Conference in Paris (COP21).
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  • The Energy and Gas Regulatory Commission (CREG as for its acronym in Spanish) will be responsible for establishing the scheme to transfer the energy purchase costs to the final user's tariff, resulting from the application of the long-term contracting mechanism.

With the implementation of this decree, that is, with the definition of the mechanism that allows the integration of FNCER in the electric power generation park, the Ministry seeks to diversify the national energy matrix, foster the competitiveness of the country's economy in terms of power, and protect the environment through the efficient use of energy and the preservation of natural resources.

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