What does the Non-conventional Energy and Efficient Energy Management Fund (FENOGE) consist of, and what is its role in assisting Colombia to achieve a Just Energy Transition?

The Non-Conventional Energy and Efficient Energy Management Fund (FENOGE) was created by Article 10 of Law 1715 of 2014 and its main objective is to promote, execute and finance plans, programs and projects aligned with the purpose of improving Energy Efficiency Management (GEE) and the use of Non-Conventional Energy Sources (FNCE) in the country, mainly those of a renewable nature.

The Fund’s main role is to be an entity that channels, catalyzes, and multiplies resources in order to promote and encourage change towards a culture of rational, efficient, and sustainable use of the energy, promoting good practices in electrical energy consumption, such as: the adaptation of residential electrical installations, small-scale self-generation solutions, energy expansion and coverage, energy studies and audits, replacement of inefficient equipment, final disposal of replaced equipment, low-emission energy sources, among others.

The Fund it is expected to contribute to the Just Energy Transition (JET) through the mitigation of the effects of climate change, improving the socioeconomic conditions of the benefited users, improving the life quality and health of the most vulnerable population and contributing to the fulfillment of the goals related with national and international commitments of the Mines and Energy Ministry (MME). This contribution covers Efficient Energy Management measures (GEE), implementation of FNCE and green hydrogen, which will mainly impact the residential sector, but without neglecting other sectors, such as: the economic, official, commercial, services, transport, industrial, among others.

What is FENOGE’s role in Colombia’s hydrogen production strategy?

From the consideration of green hydrogen into the Non-Conventional Sources of Renewable Energy (FNCER) in Article 21 of Law 2099 of 2021, FENOGE is empowered to finance and promote projects with this technology, and FENOGE’s main focus has been in the production strategy. In this way, and in line with the provisions of the Colombian Hydrogen Roadmap, issued in 2021, a call has been developed for the identification of different initiatives and projects in preliminary stages, related to all the hydrogen value chain, allowing the trends of this incipient market to be mapped and to be able to identify where it ends, but it is necessary to inject resources that allow these initiatives and projects to mature.

The generation and use of green or blue hydrogen is essential for the development of projects managed by the Fund, beginning with the sustainable mobility pilot framed in the agreement with Ecopetrol, as well as actions aimed at strengthening and managing knowledge about hydrogen as an energy vector, focused on different actors involved in the chain of this energy. As an example of the FENOGE role in hydrogen production, together with Ecopetrol, we are financing the first sustainable mass mobility pilot with hydrogen in the country, to build and test a nationally manufactured bus, which will operate on some routes of the Transmilenio mass transportation system in Bogota.

What steps is FENOGE taking in order to fulfill its 3 pillars: financial sustainability, market integration and knowledge in motion?

FENOGE works its mission in two lines, the first is Efficient Energy Management, understood as the set of actions aimed at ensuring energy supply through the implementation of energy efficiency and demand response measures, whose objective is to optimize energy consumption and the second are Non-Conventional Energy Sources that consist of available energy resources that are environmentally sustainable, but that are not widely used in the country or are used marginally. FNCER are included within FNCE.

The steps to advance in achieving its pillars in 2023 are grouped into four axes, which are:

a) Develop and manage knowledge: within the framework of this axis, actions will be carried out aimed at generating and managing knowledge by developing energy characterization studies as the development of a study for the technical structuring of the 600kV HVDC electrical interconnection, between the new Colectora 2,500kV substation in the department of La Guajira to the existing Primavera 500kV substation for the incorporation of FNCE into the National Interconnected System (SIN).

b) Improvement of efficient energy management: the activities to be carried out in this axis are focused on the replacement or improvement of end-use equipment, replacement of light bulbs with LEDs, replacement of obsolete refrigerators with efficient Type A refrigerators, adaptation and/or o Improvement of residential internal electrical installations, replacement and/or improvement of wood stoves with eco-efficient stoves, among others.

c) Adequate use of the FNCER: within the framework of this axis, projects for the use of photovoltaic solar energy are considered, mainly either in systems interconnected to the grid or in isolated systems or hybrid systems to replace or reduce the use of fossil fuels, Additionally, this axis is complemented with the structuring and implementation of projects based on the concepts of energy community contributing to the solar outburst, defined in the JET.

d) Generation and use of green hydrogen as complementary support: finally, the generation and use of green or blue hydrogen is essential for the development of projects managed by the Fund, beginning with the sustainable mobility pilot framed in the agreement with Ecopetrol, as well as actions aimed at strengthening and managing knowledge about hydrogen as an energy vector, focused on different actors involved in the chain of this energy.

In addition, regarding the dissemination and communications strategy the main goals are to:

Position the Just Energy Transition through joint communications with the MME and affiliated entities;

Monitor and approval of the Con Energía project;

Advertise of the projects: “Illuminating the Pacific and Breathe the Pacific”, and the “Sustainable Energy Caribbean Energy Efficiency Program”;

Continue to position the Energy Equity Fair in more Caribbean departments, and position the Gender Equality Policy within FENOGE communications.

By which means does FENOGE collect/multiply funds to execute projects in Colombia?

FENOGE is a trust fund, whose funding sources are:

Wholesale Energy Market: FENOGE receives 40 cents per kWh from the wholesale energy market transactions from Commercial Exchange System Administrator (ASIC). At the time, this is the principal funding source of FENOGE;

National Budget: FENOGE can receive resources from the national budget and other public entities;

Resource allocation: multilateral and international agencies, as well as foreign governments, cooperation agencies, banks, among others. For example, FENOGE channelizes an IDB loan to execute Energy Efficiency projects;

Interest rates and financial yields of our operations and donations;

Reimbursable resources: FENOGE can open credit facilities in association with commercial banks, development banks, among others, to finance Non-Conventional Energy and Energy Efficiency projects.

Which projects can you highlight that have been recently funded by FENOGE?

The “Be Energy” Program, developed by FENOGE, with support from the MME and financed by the Inter-American Development Bank (IDB): with this program 530 individual solar photovoltaic systems were installed and are operating in reconstructed homes in Providencia with an installed capacity of 424kWp. Additionally, on grid solar systems were installed in different official, and educational buildings, which allows reducing the use of Diesel, with which electricity is generated on the islands.

“Quibdó Lighting Substitution” Program: more than 10,562 high energy consumption light bulbs were replaced with LED technology for low-income families of the municipality of Quibdó, Chocó, which represent an energy saving of close to 331,441kWh/year in the benefited homes and reductions for the beneficiary close to 10% of the monthly cost of the energy bill, additionally improving the quality of lighting in the homes of the beneficiaries.

Updating the Technical Labeling Regulation (RETIQ), by a technical assistance that was provided to the MME in the preparation and development of the necessary studies, evaluations and analyzes that serve as input for the review, evaluation and structuring of the proposals that serve to update the RETIQ, integrating the guidelines that allow promoting the rational and efficient use of energy through the use of household appliances, gas appliances and end-use equipment with low energy consumption.

“Efficient Caribbean” Program: more than 2,484 refrigerators have been delivered in the departments of Atlántico, Bolívar and Córdoba, benefiting low-income homes with accumulated energy savings of close to 214,730kWh, allowing more vulnerable populations to access energy benefits.

The “Challenges and Needs in Colombia” Program: the Fund’s Executive Committee approved a budget of $60,000,000,000 pesos (USD $12,5 million) to provide integrated energy solutions through the installation of photovoltaic solar systems, and efficient energy management measures, to scale up and replicate the results and benefits identified in more than 250 health institutions and educational centers in the areas most affected by the armed conflict in Colombia (ZOMAC), and municipalities where Development Programs with a Territorial Focus (PDET).

A Technical Assistance was approved for the identification and development of projects related to FNCE in properties of the Sociedad de Activos Especiales (SAE), for the identification of possible energy generation and self-generation projects from FNCE to improve energy access to productive projects of rural families.

10 on-grid solar PV systems for educational institutions in la Guajira to reduce the energy bills and redistribute the savings in high-impact activities.

39 off-grid solar PV systems installed to enhance the health and education systems in rural and dispersed areas of the Colombian Amazon and Pacific regions.

On-grid PV systems were developed to reduce energy bills and promote the use of FNCE in official buildings as the MME main quarters, town hall buildings, and public parks, with the goal to create awareness in alternative energy sources.

What are FENOGE’s eligibility criteria for the allocation of financing resources?

FENOGE’s projects and selection processes are based on diverse criteria’s as a territorial, differential, broad and diverse approach from the social, economic and energy perspective, focused on reducing gaps in ZOMAC and PDET locations, with high NBI, IPM rates. This allows the implementation of comprehensive energy solutions based on challenges and real needs currently available, and allows the Fund’s operational and financial efforts to be invested and deployed in ZOMAC and PDET, in order to create greater social value in the territories, to promote just energy for all.

What are FENOGE’s main objectives in Colombia for the 2023-2024 period?

The main objectives that FENOGE want to achieve this year is to promote Energy Communities, to allow the most vulnerable population with a lack of energy, health and education services to achieve an available, reliable and sustainable services through sustainable and FNCE, as the motor of the Just Energy Transition.

As a result, FENOGE’s goal is to increase access to efficient and renewable energy technologies of efficient energy management and FNCE, through which encourage and promote the use, applications and benefits of FNCE, especially in low and medium-scale projects, increase the technical, financial and legal capacity to guarantee the structuring and formulation of projects with FNCE and GEE, guarantee the development of sustainable projects in FNCE and GEE, increase the availability and access to resources for FNCE and GEE projects through adequate investment and financing mechanisms, encourage and promote the use, applications and benefits of GEE measures.

The activities that FENOGE has carried out and will carry out in the short and/or medium-term period, seek to contribute to equity and binding social participation, through the development of community production models, to reduce dependence on the use of fossil fuels, thus encouraging the use of FNCER and all projects related to knowledge management, which seeks to generate a culture that contributes to the Just Energy Transition throughout the national territory, mainly benefiting to the most vulnerable communities in the country.

About the Author: Felipe Gaitán Michelsen