Empresas Públicas de Medellín (EPM) withdrew from the recent Colombian auction with 285 MW of solar power awarded and a significant leap in its diversification strategy .
The company obtained contracts for the Andes and Yariquíes projects, two developments located on the same site and which, in operational terms, will function practically as a single initiative.
“We awarded the Andes and Yariquíes projects, which together total 285 MW, which is a bigger investment. Our current capacity is 83 MW, and here we will take a significant leap to a much more substantial capacity,” said Alberto Mejía Reyes , Energy Generation Manager at Empresas Públicas de Medellín (EPM), in an interview with Energía Estratégica .
“I think the auction was successful. The product, particularly product 2, was a product that closed, and we think that's important,” he added.
The result takes on another dimension within the company's portfolio: EPM currently has approximately 4600 MW installed , mainly concentrated in hydroelectric generation, while its photovoltaic operation is currently limited to the 83 MW Tepuy park.
But the 285 MW awarded represent only a portion of the company's planned expansion. EPM aims to reach approximately 1,000 MW of solar capacity by 2030 , a goal that already includes the capacity of the Andes and Yariquíes projects.
This growth will be complemented by 1200 MW from the second stage of Hidroituango , which is scheduled to come online between the end of 2027 and the beginning of 2028, in addition to a commitment to incorporate approximately 200 MW more in small and medium-sized hydroelectric plants .
The expansion will also be accompanied by partnerships with third parties. EPM is in talks with international players interested in entering the Colombian market with a local partner , although Mejía Reyes declined to reveal the companies involved for now.
The move is part of a broader strategy. For EPM, solar energy should complement its strong hydroelectric base and broaden the technological diversity of its portfolio .
From there, the company is already looking at the next step: it is analyzing the possibility of incorporating storage into Andes and Yariquíes , an alternative that is now part of the project evaluation and that connects directly with the discussion left open by the auction on battery products.
The company's vision extends beyond these two developments. According to the manager, the integration of batteries will become virtually inseparable from the growth of Colombian photovoltaics in the coming years , especially due to the hourly patterns of supply and demand.
“We definitely don’t see solar projects in Colombia in the medium term without storage. That’s almost a necessity,” he emphasized.
The issue gains relevance after what happened with the products in the auction itself that included batteries. According to Mejía Reyes, the time allotted to structure the proposals with storage was too limited , considering that it is a relatively new component for the Colombian market and its regulation was still undergoing a consolidation process.
EPM had a direct interest in that segment. The company also participated in Product 4 with the intention of presenting one of its solar parks accompanied by batteries , but that category did not close due to the participation conditions stipulated in the process.
For Mejía Reyes, that was an unmet opportunity. “ I think that’s something that needs to be addressed very quickly, a new auction for storage ,” he says.
The manager believes that Colombia could structure a new expansion auction that includes generation with storage and, in parallel, a product exclusively for batteries for renewable plants that are already in operation .
This scenario could intensify with the upcoming expansion of EPM's own portfolio. The company plans to add another 1,200 MW of hydroelectric capacity corresponding to the second stage of Hidroituango between the end of 2027 and the beginning of 2028 .
Continue reading
Under normal hydrological conditions or La Niña, this new capacity will coexist with increasing solar penetration. Mejía Reyes warns that spillover episodes could multiply during peak generation hours , a situation that Colombia has already begun to experience.
Mejía Reyes illustrates the potential of this model with what happened during a period of high hydroelectric availability: with the reservoirs full, the price of energy reached around 100 pesos per kilowatt hour during the daylight hours and reached 1,000 pesos per kilowatt hour at night .
“ That model, which uses batteries as a service to prevent energy waste, is also an option that we see as viable ,” he argues.
EPM requests adjustments and new auctions
The company also made recommendations after participating in the process. According to Mejía Reyes, the lack of awards for some products should not translate into long periods until the next call for bids , especially when there is buyer interest and concrete expansion needs.
One of the proposals involves complementing the minimum participation requirements with reserve prices that protect demand and, at the same time, allow a category to close even when there are few bidders .
"The invitation for new auctions is to have both of these mechanisms, both a reserve price and a participation verification process," he proposed.
EPM even suggests reviewing how competition is accounted for, with the possibility of analyzing it in a more aggregated way and not necessarily product by product. Another point identified is the potential awarding of quantities lower than those offered by each developer . According to Mejía Reyes, this alternative could hinder the financial closure of projects if the ultimately contracted capacity does not allow for the sustainability of the originally planned economic structure.
The executive, however, remains optimistic about a new bidding process. Following discussions with the new energy authorities, he expects Colombia to be able to put the outstanding products out to tender again in a relatively short time .
EPM's aspiration goes even further than simply repeating this process. " There should be a pre-established schedule of auctions, at least one per year of expansion to complement the generation fleet ," stated Mejía Reyes.
According to the executive's vision, the scheme would allow the attraction of new solar and wind power capacity, as well as small and medium-sized hydroelectric plants, a technology in which Colombia still has development potential and which could provide generation outside of daylight hours.
For EPM, this type of long-term contract also constitutes a hedging tool for demand against the volatility of the spot market and the higher generation cost of some thermal power plants.
The company was satisfied with the price it received in its own bid. “ We are very happy with our price. Our price was the most competitive ,” the manager emphasized.
Even in a context marked by inflation, high interest rates and a change of government, Mejía Reyes believes that the ranges achieved in the auction were compatible with the payment capacity of the demand and with the need to have long-term contracts .
With a growth horizon, Mejía Reyes summarizes the company's perspective on the Colombian market: " Colombia is a country of great opportunities ."
The challenge, according to their interpretation, will be to transform that availability of solar, wind and hydroelectric resources into new contracted capacity, investments and projects capable of responding to the needs of the system , while storage begins to occupy an increasingly concrete place within the equation.
The execution of contracts awarded in the auction, the development of storage, competition in upcoming calls for tenders, and the decisions of the new administration will be part of the debate at Future Energy Summit Colombia , which will take place on October 1 in Bogotá .
The meeting will bring together public and private actors to address a central issue for the electricity system: Colombia has already contracted 995 MW of solar power and 100 MW of battery storage, but the final outcome will depend on that capacity securing financing, connection, and becoming operational.