Will Colombia tap its offshore wind potential?

In January, the first new onshore wind farm in Colombia for 17 years was commissioned. The 20MW Guajira 1 plant brings the country’s total wind capacity to 38MW.

May 19, 2022

Compared to regional leaders such as Brazil (21GW), Mexico (7.7GW) and Argentina (3.3GW), Colombia’s wind sector barely registers.

In January, the first new onshore wind farm in Colombia for 17 years was commissioned. The 20MW Guajira 1 plant brings the country’s total wind capacity to 38MW. It was meant to kickstart onshore wind in Colombia.

More are in progress. EDP Renewables has been working on the 212MW Alpha and 280MW Beta projects on the La Guajira peninsula, where 2.5GW of onshore wind is planned in the next few years. This pair of developments was scheduled to complete the pair this year.

But the company has seen construction delayed due to protests about the projects’ appearance, and alleged flaws in the consultation process. EDPR said it has followed all protocols.

The country may, therefore, be better off looking offshore.

Last month, the World Bank released its Offshore Wind Roadmap for Colombia, which points to a total potential offshore capacity of 50GW – and shows that Colombia’s Government has a key role to play in boosting offshore wind. But it also said the country may not achieve much of this.

In the report’s ‘high’ scenario – where the Government establishes a coordinated national strategy, supports the wind sector through policy, and upgrades transmission infrastructure – Colombia would reach 1GW offshore wind by 2030, 3GW by 2040, and 9GW by 2050.

In contrast, a hands-off approach from the Government could lead to a ‘low’ scenario. Here, projects would be smaller and face grid constraints, meaning just 1.5GW total installed capacity by 2050.

How big is the opportunity likely to be? And will the market be large enough to make it worthwhile for investors?

World-class wind resource

Sixty-five percent of Colombia’s electricity currently comes from hydroelectric power. The rest is primarily based on fossil fuels.

The report highlights that by backing offshore wind, Colombia could improve energy security by complementing the dominant hydroelectric sector while reducing exposure to volatile gas and coal prices.

Colombia is certainly not lacking renewable resources. It has over 4,710 square miles of promising offshore wind sites, including the potential for 27GW of fixed-foundation developments.

Additionally, the country’s Caribbean coast sees wind speeds of over 10 m/s, which is on a par with the North Sea. Offshore wind projects based around the northeast coast – La Guajira – could benefit from a capacity factor of 70%. The International Energy Agency reported in 2019 that a typical range for offshore wind capacity factors is 29%-52%.

Ifs and buts

Offshore wind could also drive significant economic growth in Colombia, and promises skilled, high wage jobs. The World Bank estimates that rolling out the technology successfully could net $27bn in foreign direct investment by 2050.

But this surge of investment cannot be taken for granted. There are two key areas to consider: the supply chain and grid infrastructure.

The critical question for Colombian policy makers is whether they can ensure deep private sector involvement in the supply chain. If enough large projects come into play, the sustained momentum will incentivise global players to invest in local or regional manufacturing hubs.

Utilities also want confidence that wind projects won’t be delayed by protests, whether they relate to onshore or offshore schemes.

In contrast, a smaller offshore sector under the ‘low’ scenario means greater reliance on global contracts. Projects would be constrained based on the availability of key components and construction vessels worldwide.

And there is transmission. As in many countries, Colombia’s main areas of offshore wind potential are sited away from major population centres. La Guajira has minimal high voltage transmission, and planned extensions are already allocated to future onshore renewables projects.

By necessity, the first large offshore wind projects will likely be towards the western side of the Caribbean coast. Offshore wind in Colombia therefore depends on major sustained investment in grid infrastructure.

The next key date for would-be investors in Colombian offshore wind is 29th May, the presidential election. Should anti-oil ‘candidate for change’ Gustavo Petro succeed, as his current poll lead shows he should, then the prospects for offshore wind will brighten. We won’t take this for granted.

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