Boston, MA -- (SBWIRE) -- 11/11/2013 -- Colombia turns to hydroelectric sources of power for the majority of its electricity requirements, and while this strategy suffices in times of abundant rainfall, it does leave Colombia vulnerable to outages in dry years. In terms of diversification, the regulator CREG has plans to construct a liquefied natural gas re-gasification plant on the Atlantic coast, and this could create opportunities for increased gas-fired power. While the electricity interconnection between Panama and Colombia has been put to one side, talks have begun between Colombia and Venezuela to improve existing and create new electricity interconnections, which create opportunities for investment.

Hydroelectric power continues to contribute to 75% of total consumption in Colombia, despite the inherent problems associated with this source of energy. This overdependence is even more acute in years of low rainfall. The sector faces other setbacks, such as protests at construction sites and a risk of attack in zones that the FARC guerrillas consider to be their own.

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During the period 2013-2017, BMI forecasts that Colombia's overall power generation will increase by an annual average of 3.4%, reaching 76.0 terawatt hours (TWh). Driving this growth are annual gains of 3.6% in hydroelectric power generation, while coal and gas-fired generation are forecast to increase by an annual average of 2.9% and 2.7% respectively.

Following an estimated rise in real GDP of 4.0% in 2012, BMI expects average annual growth of 4.5% between 2013 and 2022. Net power consumption looks set to increase to 64.6TWh by 2017, rising to 78.9TWh by 2022. The theoretical net export capacity by 2017 is 0.36TWh, and Colombia's export capacity will increase to 1.13TWh by 2022.

Key developments in Colombia's power sector this quarter:

- Colombia's Minister of Mines and Energy, Federico Renjifo, stated in mid-August 2013 that the government had 11 electricity generation projects in the pipeline, which will add 2000MW to the grid in the next two and a half years.
- Electricity provider, Isagen, has made the news this quarter as the government has decided to sell its 57.66% stake in the utility; in late August 2013, the sale was suspended when lawyers representing former President Alvaro Uribe successfully gained a court order temporarily preventing the sale. Uribe has stated that Isagen should remain in public hands in order to guarantee the quality of electricity infrastructure.
- In August 2013, the Inter-government committee for Venezuela and Colombia's electricity sector had its first meeting in Caracas. The group discussed, among other topics, proposals for four new electricity interconnection lines between the two countries.

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