Bernardo Vargas Gibsone, President, Interconexión Eléctrica (ISA): Interview

Interview: Bernardo Vargas Gibsone

How were the challenges faced by Colombia’s electricity sector in 2016 handled in an efficient way, and what lessons were learned?

BERNARDO VARGAS GIBSONE: The challenges Colombia faced at the beginning of 2016 were of historical dimensions. Since the end of 2015 the country has been hit hard by the prolonged El Niño climatic phenomenon – probably the most intense we have ever seen as it lasted over fourteen months. Simultaneously, in February 2016 we saw what some have called the perfect storm when a technical problem at the Guatapé hydroelectric plant forced it to suspend operations coinciding with the droughts caused by El Niño. The result gave us a fright and it even led the government to implement programmed rationalisation. Despite this, there was no need to turn off any electric circuit because the hydroelectric energy that was not being generated due to the droughts was substituted by thermal energy. The backup thermal energy that was used has been in production for the past 20 years and it was created for mitigate these specific situations. Indeed, we were anxious to a certain extent, but we were able to overcome the challenges, proving that the policies for creating backup thermal energy through the Reliability Charge scheme were useful and worked perfectly when needed.

The other conclusion was the ability of Colombians to react, given the decision of the president who assessed not to rationalise, alleging it would bring many macroeconomic problems, and simply asked Colombians to save energy. The energy-saving movement carried out by citizens led to Colombia saving the amount of energy technicians said the country needed to meet its requirements. The capability to react by the Colombian people is huge and must be utilised in the future. Furthermore, it indicates that when our country looks at the electricity equation we not only need to look at the supply side of it – where historically we have concentrated our efforts through hydraulic and backup thermal supply – but we must also assess demand side factors.

We must analyse the demand response of deliberate changes in consumers’ consumption of electrical energy with respect to usual usage patterns in response to price signals or incentives. I believe going forward that regulation in the electricity sector will be more oriented towards reinforcing demand response. When given more incentives of these sorts we could prevent these situations from reoccurring.

What developments are needed for diversification of Colombia’s energy mix?

VARGAS: Colombia’s dependency on hydroelectric sources is close to 80%. The second main source of energy is thermal. There is enough installed capacity of thermal energy to cover the country’s needs at a given time. The issue is that in a country that is growing as steadily as Colombia is, the demand for electricity will do the same, so we have to focus on adjusting supply to the increasing demand. Opportunities in the hydroelectric segment will remain, as well as in coal, if managed well with the existing clean technology available. Ultimately, there is a need for greater non-conventional sources, which is an area that will continue to grow. This is why regulator priorities include building a larger offer and expanding Colombia’s capacity, while focusing on non-conventional sources.

After expanding capacity we will need to connect the new supply with consumption areas through building a greater network, which should reach areas not previously connected to the grid. We need to ensure that companies are dependable and technically proficient in this regard and that the two governmental bodies in this sector – the Mining and Energy Planning Unit and the Energy and Gas Regulation Commission – continue to be in close contact with the operators and hear their needs and concerns.