“Regulation to foster renewable energy and distributed generation in Colombia” – Summary

This paper presents the main findings of the work carried out by Universidad de los Andes and Universidad Nacional de Colombia, with support from Colciencias – the Colombian National Science Development Institution) and ISAGEN, a power generation company. These results are briefed in the following items: i) The main drivers for penetration of new energy sources and cleaner Technologies (not only for electricity) in the country, will be in its order: energy basket diversification, reduction of dependence on fossil fuels (as it is the case of biofuels), minimization of environmental impact, and support to technology and industrial development. ii) Current regulation of the energy market is not explicitly against the development of these power sources and technologies, however the market architecture and rules were made thinking in conventional sources and technologies, then some adjustments should be carried out to "level de playing field" for renewable in the country, this should aim to include all external cost and benefits from its installation and operation, as well as from the participation of distributed generation in grids. iii) It is indispensable to have appropriate financial schemes for longer pay-back periods with these technologies, investors should be aware of the benefits and complementarities that can be achieved in power markets, such as emission reduction. In addition, governments should give some priority to in-country technology development and to the adoption of some of these sources when conditions are the most favourable.