Colombia could be a major supplier for the global energy transition

August 31, 2023

At the epicenter of the fight against climate change, the energy transition in Colombia faces a crucial stage. This shift towards cleaner energy sources is a path full of challenges and opportunities.

energy transition, global energy transition, energy transition in Colombia, Más Colombia

The energy transition in Colombia and the world has become a priority to address the challenges of climate change and the reduction of Greenhouse Gas (GHG) emissions.

In general terms, this involves gradually shifting from fossil fuel-based energy sources to cleaner and more sustainable sources, such as renewable energies.

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However, it is important to note that for this transition to be effective and feasible, the renewable energy industry also relies heavily on mining products.

At the heart of the energy transition are renewable energy technologies such as solar and wind power. These technologies are critically dependent on strategic minerals for their production and operation.

For example, solar panels require minerals such as silicon, indium and tellurium, while wind turbines require rare earth magnets such as neodymium and dysprosium, of which China is the leading producer and processor.

Strategic minerals for Colombia’s energy transition

Colombia is a country rich in natural resources and minerals. It has significant deposits of coal, nickel, gold, copper and other minerals that are fundamental for various industries, including the energy transition. However, our country does little to process them.

By responsibly harnessing these resources, Colombia’s energy transition would receive a strong boost, and our country could become a strategic supplier of the manufacturing needed for the production of renewable and energy storage technologies, thus significantly strengthening its export capacity.

Colombia’s energy transition requires large quantities of less exotic minerals. Daniela Quintero, sociologist and environmental reporter, points out that, in the case of Termoguajira’s decarbonization, 45 tons of copper are required per megawatt (MW) of installed solar capacity.

And, according to the Colombian Mining Association (ACM), 1,200 tons of concrete, 47 tons of copper, 335 tons of steel and 3 tons of aluminum, among other minerals, are required to build a windmill with a generating capacity of 3MW.

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The growth of the renewables industry worldwide represents an opportunity for Colombia, as our country has strategic conditions to play a key role in the value chains that drive the energy transition.

Colombia has the opportunity to join the vanguard of the energy revolution

The exponential growth in demand for materials and equipment for the energy transition is creating an attractive space for the country.

The undisputed star in this scenario is solar PV, whose installed capacity surpassed all other technologies in 2018, according to the International Renewable Energy Agency (IRENA).

According to IRENA, regions such as Africa, India and Southeast Asia will drive the expansion in solar PV capacity over the next two decades.

Colombia’s Energy Transition Plan is unclear

So far, there have been many announcements and few results in terms of energy transition in Colombia, but what generates more doubts is the approach to accelerate the transition. At the moment, there are several environmental and regulatory gaps, and the policy for the exploitation and processing of strategic minerals is unclear.

For Amat Zuluaga, geologist, energy systems analyst and expert in energy transition, there is a worrying lack of exploration and measurement of the natural resources present in Colombia. He also points out that the outlook is not encouraging, since the Colombian Geological Service has cancelled mineral exploration programs throughout the country due to what he considers to be a mistaken vision of its new director.

This is paradoxical, considering that while in Colombia there seems to be a reluctance to explore and develop mining, other countries are moving to become crucial players in the production of minerals needed for the global energy transition.

A second problem identified by Zuluaga is technological. He points out that the infrastructure required for the new green energies demands advanced technology, large factories, assembly plants, steel and metallurgy plants.

What is ironic is that, despite Colombia’s willingness to transition to cleaner energy sources, there seems to be a lack of attention to the industrialization of these sectors in the country, which could hinder the progress of the energy transition in Colombia.

Another problem that has been little considered by the government has to do with the goals of the National Development Plan (NDP) in social and energy matters, since the resource requirements to meet them exceed the country’s productive and import possibilities.

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According to the ACM, in order to meet the social and energy goals of the PND, it is necessary to multiply by 10 the Colombian production of copper, triple the national production of cement and have two additional mines, similar in size to the largest ones currently existing in Colombia, where construction materials such as clays and sands can be extracted.

In addition, “17 thousand tons of nickel, 56 thousand tons of aluminum, 10 thousand tons of manganese, 11 thousand tons of silicon, 5 thousand tons of zinc, 5 thousand tons of cobalt, 4 thousand tons of lithium, 3.4 million tons of steel, sands, fillers, clays, among many other minerals are needed”, explains the union.

Therefore, meeting the NDP goals implies a demand for minerals that the country cannot meet in the short term, so it would have to import them.

What Colombia’s energy transition requires

For experts such as Diego Otero, Manuel Rodríguez Becerra and Jorge Robledo, President Petro’s plan, by proposing to give up mining and oil exploitation, is not strategic, taking into account Colombia’s capacity to supply its own raw material needs for the energy transition and the closing of social gaps.

While the idea of reducing dependence on fossil fuels seems laudable, the truth is that an abrupt transition could have negative implications for the country’s economy and development, and significantly reduce the resources required for the government’s social policies.

Instead of completely abandoning mining and oil exploitation, Colombia could adopt a more balanced approach. This involves promoting investment in renewable energy and clean technologies, while ensuring responsible exploitation of mineral resources.

In this way, it could supply both domestic needs and potentially become a supplier of strategic products and services in the global energy market.

Alejandra Osorio, Executive Director of Acopi Bogotá – Cundinamarca, points out that there are companies with the capabilities to take advantage of the national productive potential that demands a policy of transition, reindustrialization and closing of socioeconomic gaps.

In his opinion, many companies are capable of taking advantage of a greater oil refining and mineral transformation capacity in Colombia. Osorio insists that, “with the support of the State, it is possible to link the development of MSMEs to the productive transformation that the energy transition requires”.