The Colombian Ministry of Mines and Energy has officially published a draft resolution that calls for and defines the country’s first long-term electricity contracting mechanism of the year. The document has been opened for public consultation in accordance with Article 8 of Law 1437 of 2011 and marks a significant step in Colombia’s long-term renewable energy planning.

The auction will be carried out by a specialised operator, with a deadline for awards set before 30 June 2026. Contracts will follow a “pay-as-contracted” structure, with a duration of 15 years starting on 1 January 2030—or 1 January 2035 for one of the products on offer.

The mechanism aims to accelerate the deployment of projects based on non-conventional renewable energy sources (NCRES) and to support compliance with Article 296 of Law 1955 of 2019. This regulation requires electricity retailers to source between 8% and 10% of their energy purchases through contracts backed by NCRES, such as solar PV and wind power.

According to the draft, the volume of energy contracted under this auction will count towards meeting that mandatory renewable quota. The Ministry notes that, as of November 2025, “most retailers in the Wholesale Electricity Market have not yet reached the ten per cent (10%) renewable energy threshold in their supply mix”.

Contractual products on offer

The proposal defines four contract products, designed to match different generations and demand profiles:

• 24-hour coverage

• Solar energy between 06:00 and 18:00

• Two time blocks: 08:00–17:00 and 17:00–21:00

• Evening energy between 18:00 and 22:00

Eligible projects must be new-build facilities with a net effective capacity of at least 5 MW and must be registered in the Generation Project Registry of the UPME (the Mining and Energy Planning Unit).

The draft also allows the participation of battery energy storage systems (BESS), both in new and existing projects, subject to specific technical requirements depending on the contract product.

Lessons from previous auctions

The resolution recalls that Colombia’s renewable auctions held in 2019 and 2021 awarded 19 projects with a combined capacity of 2,086.2 MW. However, only around 17% of that capacity has entered into operation to date.

Based on figures from XM, the system operator, a total of 1,595 MW of solar PV capacity has been added to the grid, of which just 348 MW correspond to projects awarded under long-term contractual commitments.

Although the call for this auction was initially anticipated in October last year, the process is only now taking concrete shape. A key feature—and source of concern—is that it would run in parallel with Colombia’s reliability charge auction.

The energy regulator, the CREG, has already launched the reliability charge auction for the 2029–2030 period, scheduled to take place in March 2026 according to the system administrator’s timetable. This process includes stages for bid bonds, offer submission and the publication of results.

Market players have expressed concerns over the lack of technical guidance on how both mechanisms will be coordinated—an unprecedented situation within Colombia’s regulatory framework.

The draft resolution does not yet specify how much capacity will be auctioned or under what detailed conditions, limiting developers’ ability to plan investments. While the text remains in draft form, industry stakeholders stress that clear coordination between the two auctions will be critical to ensure regulatory certainty and to avoid overlapping obligations—particularly at a time when new renewable capacity is urgently needed by the system.

Additional rules and next steps

The proposal also sets out provisions on contract assignment, grounds for bid rejection, guarantee mechanisms, tie-breaking criteria and a price indexation formula linked to the US Producer Price Index (PPI) and Colombia’s IPP, plus the CERE component under existing regulation.

Finally, the draft assigns to CREG the task of issuing the complementary rules required to implement the scheme, including technical provisions on dispatch, imbalance settlement and the participation of assets with energy storage.

For now, the draft resolution has not yet been formally enacted and remains subject to change. Nevertheless, it represents a key step towards consolidating a regulatory framework that enables long-term renewable energy planning through bankable, long-duration contracts.