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BMI View: With the rain finally returning and rivers such as the Magdalena flowing fast again, Colombia
appears to be finally getting over the worst. For months Colombia's electricity supply was threatened
following a nationwide drought brought on by El Niño that slowed the rivers that power the nation's grid.
The Government was only able to avoid blackouts thanks to a combination of a series of energy-saving
measures, an increase in imports of energy from Ecuador and the use of emergency oil-fired thermal
generators. The Minister of Mines and Energy, Germán Arce Zapata has so far announced that the country
will strengthen its electrical system to make it "more reliable and efficient" against climate phenomena such
as El Niño. However, with hydropower currently accounting for 70% of the country total generation, we
believe that the country will need considerable investments to diversify its energy supply, to meet the
increasing demand for power.
Latest Updates And Structural Trends
? The impacts of the drought created by the El Niño weather phenomenon will be the main driver of
developments in the Colombian power market in 2016. We expect a sharp fall in hydropower generation
in 2015-2016, which has forced additional diesel and natural gas-fired power plants to be dispatched. The
availability of excess thermal capacity to be used during periods of poor hydrology and plans to import
natural gas should both allow Colombia to avoid experiencing power cuts, albeit narrowly.
? Further policy support to the sector and the creation of the necessary power transmission infrastructure
will be required to kick-start Colombia's underdeveloped renewables industry. Until these conditions
materialise, distributed generation will be the most likely segment to see developments in the country,
owing to vast swathes of the Colombian territory not being connected to the electricity grid.