Colombia’s Hydrogen Roadmap
The Hydrogen Roadmap aims to contribute to the development and implementation of low-emission hydrogen in Colombia, thus reinforcing the Government’s commitment to the reduction of emissions stipulated in the 2015 Paris Agreement goals. For the development of this Roadmap, the Colombian Government has the support of the Inter-American Development Bank (IDB), through Development Bank (IDB), through its Energy Division and its Climate Change and Sustainability Division.
The Roadmap takes as its starting point the analysis of hydrogen production capacity, expected demand, associated emissions reductions, the country’s export potential and the regulatory measures needed to implement a hydrogen deployment plan in Colombia.
Hydrogen is attracting great interest as a key instrument in the energy transition process. Hydrogen is the simplest and lightest element in the periodic table, and its versatility as an industrial feedstock, fuel and energy vector for energy storage and transportation allows for a large number of applications, some of which have not yet been fully developed. Furthermore, hydrogen has no direct greenhouse gas (GHG) emissions during its end use and virtually no other pollutant emissions. Because of its reactivity, hydrogen does not usually occur in nature in isolation and must be extracted from water, hydrocarbons or biomass. Depending on the hydrogen production process and the energy source used, the associated CO2 emissions will vary. The use of renewable energies or the capture of the CO2 emitted when fossil fuels are used in its production make hydrogen an alternative for the decarbonization of multiple end uses, being all the more interesting the more complex the electrification of these.
Reaching decarbonization strategy goals
Low-emission hydrogen will help accelerate the achievement of Colombia’s decarbonization strategy goals. As an energy vector, hydrogen will accelerate the deployment of Non-Conventional Renewable Energy Sources (NCREF), such as solar and wind energy, through seasonal energy storage and its transportation to demand centers. Colombia has a highly decarbonized energy matrix and renewable resources for the production of green hydrogen at competitive costs. In addition, Colombia has gas and coal that, combined with CO2 capture and storage or utilization, diversify the options for low-emission hydrogen supply, ensuring self-sufficiency.
In the industrial sector, hydrogen will progressively replace the use of fossil fuels and raw materials in industries for which few low-emission alternatives exist today. Hydrogen also provides an alternative for those modes of transport that are difficult to electrify. Currently, low-emission hydrogen initially faces a cost gap with gray hydrogen and conventional fuels. However, low-emission hydrogen would make it possible to maintain current energy self-sufficiency and avoid dependence on imported energy in the future, facilitating, in the long term, industrial development based on the creation of new value chains for low-emission products.
Energy transition leadership in the region
Colombia has the conditions to take advantage of the hydrogen opportunity and become a regional leader in the energy transition thanks to its privileged geographic location and a stable regulatory and political framework, capable of attracting long-term investments. The development of hydrogen production and the adaptation of economic sectors to its use will require large investments in technology development and infrastructure creation. Colombia, like the world’s leading economies, has created investment plans and incentives to develop complete value chains around low-emission hydrogen. These plans are combined with a series of regulatory developments, a research and development (R&D) policy aligned with an industrial policy, and the creation of markets that incentivize the use of hydrogen. Colombia will accelerate the acquisition of national capabilities and position itself globally in this emerging market through cooperation agreements for access to new technologies, project financing and the opening of routes for the export of hydrogen and derivatives.
The Offshore Wind Roadmap
The Offshore Wind Roadmap was initiated by the World Bank country team in Colombia under the umbrella of the World Bank Group’s Offshore Wind Development Program, which aims to accelerate offshore wind development in emerging markets, and was funded by the Energy Sector Management Assistance Program (ESMAP) in partnership with the International Finance Corporation (IFC).
Colombia has some of the best natural conditions for offshore wind in the world and there is already abundant private sector interest in developing projects. Colombia has an opportunity to use this indigenous energy resource as part of the transition to Net-Zero carbon and to help manage the country’s energy trilemma:
Security of supply: With close to 70% of Colombia’s electricity being supplied by hydropower, the country is heavily reliant on its water reserves and is exposed to potential shocks caused by droughts – which are becoming more frequent as the impacts of climate change are felt. Diversification of the electricity supply will provide greater security of supply. Offshore wind’s high, and less variable, output, in comparison to other nonconventional renewable energy (NCRE) resources such as solar PV and onshore wind, make it well suited to diversify the electricity mix at scale.
Sustainability: Colombia’s New Energy Plan1 estimates that around 19 gigawatts (GW) of new NCRE will need to be added between 2020 and 2050. More ambitious NCRE needs have also been announced in the context of Colombia’s carbon neutrality by 2050 strategy. According to this strategy, Colombia’s electricity use needs to increase from 18% of total energy consumption in 2020 to as much as 70% by 20502 . Offshore wind could contribute some of this new NCRE capacity, as it uses less land than other forms of variable renewable energy and may be more acceptable to Colombia’s citizens.
Equity: Colombia’s electricity supply needs to be affordable and avoid being susceptible to price increases caused by droughts or rising costs of imported fossil fuels. While the cost of energy for offshore wind is greater than that for solar or onshore wind, it can be competitive in the medium to long-term3 when deployed at scale and its lower variability is likely to mean that electricity balancing costs will be lower, thereby reducing the overall cost to consumers.
Beyond the energy trilemma, the development of offshore wind could contribute other benefits to Colombia, including:
Economic benefits: The development of offshore wind in Colombia could also generate numerous economic benefits. Under this roadmap’s high growth development scenario, for example, by 2050 offshore wind could support up to 26,000 full-time equivalent (FTE) jobs and add around USD $3 billion to Colombia’s economy per annum. The rapid development of the global offshore wind industry will also provide some regional export opportunities for Colombia’s supply chain, especially for projects in the southern-USA and elsewhere in Latin America.
Investments: The development of 9 GW of offshore wind by 2050 would also require significant investments from international and domestic sources, both to finance the build-out of projects and to develop the local supply chain and industry.
Infrastructure upgrades: Large-scale offshore wind development will catalyze investment into Colombia’s port and grid infrastructure. These upgrades will exploit infrastructure sector synergies, having positive impacts outside of the offshore wind sector, for example by improving grid strength and reliability, or supporting the improvement of port infrastructure.
Decarbonization and exports: Low-cost, large scale offshore wind could be used to produce green hydrogen and other zero-carbon energy vectors such as ammonia. These products could not only enable the decarbonization of local industry such as agriculture and transportation, but could potentially be exported to other consumers. The economics of this opportunity will need to be assessed as the technology for producing green hydrogen matures. In addition, with increased future electrical interconnection to neighboring systems, excess electricity from offshore wind could also be exported.
Colombia’s Wind Potential
Colombia’s Caribbean coastline4 has abundant, energetic offshore wind resources with a total technical potential resource estimated at 109 GW. Wind speeds, particularly in La Guajira region, consistently exceed 10 metres per second and the estimated net capacity factors for representative projects – how much electricity these could produce compared to their theoretical full potential – approach 70% and are among the highest in the world.
This coastline, however, features many protected areas, critical habitats, and environmental sensitivities. Its waters are used by commercial and artisanal fisheries, and onshore lands are important to indigenous communities. Furthermore, there are areas allocated for hydrocarbon activities, as well as routes heavily traversed by shipping. Analysis for this roadmap used existing spatial data to further characterize Colombia’s offshore wind resources and these potential constraints to development. It assessed a wide range of environmental, social, and technical issues to identify technically attractive initial exploration areas that, based on the data available, are likely to have lower negative impacts associated with development.
Taking into consideration environmental, social, and technical constraints, the potential development is estimated at about 50 GW, equivalent to 2.8 times the total existing generation capacity in the country. Of the 13 initial exploration areas, five are in shallow water (<70 metres) suited to fixed-foundation offshore wind, representing over 27 GW of potential across 6,800 square kilometres, and eight are in deeper water (+70 metres) suited to floating-foundation offshore wind, representing over 21 GW of potential across 5,400 square kilometres. Stakeholder engagement and further data will be required to better understand these areas; the roadmap recommends this as one of the priority next steps.