Colombia launched a new long-term auction that modifies key aspects of the previous design, with the aim of correcting the difficulties faced by the 2019 and 2021 calls for bids.
Key changes include the inclusion of storage as a core technology, products tailored to real generation profiles, and an extended obligation horizon until 2035 , allowing for greater bankability and competitiveness in projects.
Álvaro Pérez Ramírez , Manager at AFRY , explained that the new mechanism introduces greater flexibility for generators and a more complex design.
The possibility of declaring real hourly curves, incorporating batteries and extending deadlines responds directly to the bottlenecks faced by previous developments, many of which did not become operational, mainly due to delays in licensing, transmission and financial closing.
"In Colombia, building a large renewable energy project takes longer than was thought in the first auctions," Pérez Ramírez pointed out, referring to the fact that the previous conditions did not take into account the actual maturity of the local market or the regulatory timelines for the execution of large-scale works.
In this sense, the new deadlines allow contracts to be aligned with actual development cycles , reducing the risk of penalties and generating greater confidence for international actors.
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The experience accumulated over the past seven years demonstrated the need to redesign the mechanism, not only to ensure that awarded projects are built, but also to allow for more efficient integration into the system.
The previous scheme, with flat energy blocks, offered certainty to demand but penalized technologies such as solar, whose profile is not constant throughout the day.
Now, the products allow for the declaration of real generation curves and specific options are introduced, such as solar + battery hybrids , aimed at covering the demand between 5:00 PM and 9:00 PM, one of the most critical times for the system.
This technical differentiation also considers storage systems as autonomous solutions.
A stand-alone battery project can shift energy from cheaper hours to peak consumption times, which not only improves reliability but also helps reduce emissions by replacing fossil fuel generation during those times.
The new scheme marks a turning point in the recognition of storage as a system reliability asset , not just as a renewable backup.
" There is a clear intention for battery storage to become a central component of the generation mix ," remarked the AFRY specialist.
The publication of CREG Decree 701 103 of 2025 , which establishes a framework for Battery Storage Systems (BSS), was a previous step in that direction, although there is still work to be done in terms of operation and complementary services.
Among the aspects that still need to be refined, the need for clear regulation on how to dispatch, assess deviations and integrate storage systems into the ancillary services market stands out.
Added to this is the persistent problem in the execution of transmission works, which remains one of the main structural risks of the sector .
If these infrastructures do not advance in time, the projects could once again become disconnected, as has already happened in previous cycles.
Regarding price signals, one of the finest technical aspects of the design, Pérez Ramírez warned that ceilings must be flexible enough to allow the introduction of technologies such as storage .
Batteries operate by arbitrage, charging energy during low-price periods and delivering it during the most expensive hours of the day, which coincide with the highest voltage for the system; therefore, artificially limiting prices during those hours could neutralize the economic incentive for these technologies and restrict their development.
Added to this is an essential point to guarantee the continuity of investment: institutional stability .
Without clear and consistent rules, even the best mechanisms lose traction.
"If the rules change every few years, investment will shrink," the executive warned.
The new Colombian auction thus represents an attempt at institutional learning that seeks to consolidate a more robust, predictable electricity contracting ecosystem aligned with the technical challenges of the energy transition.
It remains to be seen how the market will respond to this greater complexity of products and conditions, and whether demand will show the necessary appetite to accompany the transformation.