The asset that wins the firmness auction may lose value when the rule changes

In Colombia, the firm energy auction awarded 99% of new capacity to solar in 2024, and 55.9% to thermal in 2026.

The February 2024 auction, for 2027–2028, awarded 4.44 GW of solar. The May 2026 auction, for 2029–2030, awarded 4.07 GW of new capacity: 55.9% thermal and 38% solar. Measured over all firm energy awarded, rather than over new capacity, solar contributes 7.7%.

Between the 2 auctions, the rules, prices, and hydrological context also changed. Attributing the change in mix to a specific rule remains a hypothesis: the effect of each change has not been isolated.

We propose that, with a Capital Projects Decision System, the developer evaluate the asset under the current firmness rule and under explicit change scenarios. Storage would be sized by its cost and value against other configurations, as well as by the technical requirement. The test would be whether the evaluation shows that batteries above the minimum improve expected profitability or reduce risk at an acceptable cost.

With how much storage, and under what firmness rule, do you recover your investment?

The full Perspective, with its sources, is available on request.