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The Independent
4 days ago
- Business
- The Independent
Big firms abandon wind energy plans in Colombia amid regulatory shifts, social issues and grid gaps
Colombia's ambitious plans for wind energy development, especially in the resource-rich La Guajira region, are facing serious setbacks as major companies pull out and projects stall, industry experts say. Margarita Nieves, director of the Colombian Offshore Wind Research Network, told The Associated Press that despite large targets — including 1.1 gigawatts awarded in a 2019 auction — only two wind farms are partially operating today, with a combined capacity of less than 32 megawatts. Colombia's Mining and Energy Planning Unit estimates the country could generate up to 18 gigawatts of wind energy — nearly double the nation's current installed electricity capacity of 20 gigawatts. Several companies brought equipment and infrastructure to Colombia around 2021 before securing permits, but parks remain unbuilt. Key obstacles include limited grid connection infrastructure in La Guajira, recent regulatory changes that reduce financial returns and complex social and leadership challenges. Colombia, Latin America's third-most populous country, has pledged to reach net-zero emissions by 2050. President Gustavo Petro, the country's first leftist leader, presents himself as an environmentalist and advocate of a just energy transition. Yet Colombia remains deeply reliant on fossil fuels — oil is its top export and a major source of government revenue. In 2023, Italian multinational Enel withdrew from the Windpeshi onshore wind energy project in La Guajira. By late 2024, EDP Renewables canceled two major projects, Alpha and Beta, two large-scale onshore wind farms in the same region. In May, Colombian state-owned oil company Ecopetrol acquired nine solar and wind energy projects from Norway's Statkraft, marking the European firm's exit from the country. The portfolio spans La Guajira, Sucre, Cordoba, Caldas, and Magdalena, with a combined potential capacity of 1.3 gigawatts. Only one project is currently operational, with others expected to come online between 2026 and 2027. The move is part of Ecopetrol's broader energy transition strategy to reduce reliance on oil and gas and meet net-zero goals by 2050. However, challenges like regulatory delays, governance concerns, and potential impacts on Colombia's fiscal stability raise questions about the transition's pace and economic effects. Nieves warned that the situation is 'very concerning,' with only two of over 20 planned projects advancing. She stressed the need to speed up regulatory processes, improve consultations with Indigenous communities — notably the Wayuu in La Guajira — and ensure sufficient electrical infrastructure. The delays also threaten Colombia's offshore wind ambitions 'Colombia has more than 20 years of delay in wind energy,' Nieves said. 'Brazil, in contrast, has built over 1,300 onshore wind farms in the last two decades and is a top global turbine producer." The wind energy projects were part of Colombia's just energy transition, aiming to replace fossil fuels with renewables while supporting vulnerable groups like Indigenous peoples. The region is home to Cerrejon, one of the largest open-pit coal mines in the world and a major player in Latin America's mining sector, which has been in operation since 1985. The mine has just nine years left in its life span, and its closure, without alternative plans in place, will deal a significant blow to the region's economy. Resistance to projects with Indigenous communities For Samuel Lanao, head of La Guajira's environmental authority, the main reason several licensed renewable energy projects are being sold off is because companies struggle with deep-rooted social tensions, particularly during the prior consultation process with local Indigenous communities. Lanao said confrontations have emerged between firms and residents, derailing expectations of development. 'This has been a major blow to La Guajira,' he said, 'as there were high hopes for economic and social progress through these projects.' The Wayuu people, a seminomadic Indigenous group in the arid La Guajira region of northern Colombia and Venezuela, remain divided over wind energy development. While some have welcomed the economic support offered by companies building turbines on their ancestral lands, many others have raised concerns over environmental and cultural impacts, and a lack of meaningful prior consultation, in what is one of Colombia's poorest regions. Diego Patron, manager of the Jemeiwaa Ka'I wind project, a large-scale wind farm cluster in La Guajira, acknowledged the pioneering nature of Colombia's early wind efforts, which began in a regulatory vacuum without clear institutional frameworks. 'These foundational projects faced a steep institutional and territorial learning curve, resulting in the loss of key strategic projects,' Patron said. 'However, their legacy now forms the cornerstone for new initiatives." Patron believes that barriers around legitimate Wayuu community representation, environmental permitting, and contract resolutions have been overcome, creating more stable conditions.' Patron said misinformation deepened tensions and unfairly damaged firms like EDP that, he says, aimed to support communities. ___ The Associated Press' climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at
Yahoo
28-02-2025
- Business
- Yahoo
Four-year delay for SouthCoast Wind offshore wind farm floated. What we know.
The developer behind SouthCoast Wind is planning for the possibility of up to a four-year delay for the offshore wind farm that would supply power to Rhode Island and Massachusetts. Ocean Winds, a joint venture between Portugal's EDP Renewables and France's ENGIE, confirmed to The Providence Journal Thursday, Feb. 28, that it was writing down the value of the project by €267 million, or about $278 million, to account for the lost revenues that would result from delaying power production by four years. The company said that it's accounting for the possible delay, which would push the project's operation date back from 2030 to 2034, because of uncertainties caused by the executive order signed last month by President Trump that aims to curtail offshore wind development in America by stopping new leases to ocean waters and reviewing permits for projects already underway. The company described the write-down as 'a precautionary measure based on scenarios of potential delays in its projects.' 'Ocean Winds strongly believes in the potential of offshore wind to generate significant economic activity and provide abundant, domestic energy to meet rapidly growing demand in the U.S. and remains confident in finding a path forward in coordination with all relevant authorities in the upcoming months,' the company said in a statement. Ocean Winds is currently negotiating contracts with utilities in Massachusetts and Rhode Island for the sale of power from SouthCoast Wind. Under a multi-state solicitation for offshore wind proposals, Massachusetts agreed to buy 1,078 megawatts of capacity from the project while Rhode Island committed to the purchase of 200 megawatts. The contracts were set to be agreed to by Jan. 15, but the deadline was postponed to March 31. While President Trump has vowed to stop offshore wind development, support for the industry among policymakers in Rhode Island and Massachusetts remains strong and work has continued on projects off southern New England. They include Revolution Wind, the 65-turbine array, that would deliver 400 megawatts of capacity to Rhode Island and another 304 to Connecticut. Many of the project's turbines have already been installed. SouthCoast Wind, while not yet under construction, has secured a lease to 199 square miles of federal waters 20 miles south of Nantucket and in the final weeks of the Biden administration won a key federal approval from the Bureau of Ocean Energy Management. The project could cost as much as $5 billion and generate up to 2,400 megawatts of capacity, enough to power more than 1 million homes. Construction would start next year if there are no delays. But the full ramifications are still unclear of Trump's crackdown on clean energy, which has also included a separate executive order that cuts off funding for solar power, electric vehicle charging and other projects aimed at reducing planet-warming greenhouse gases. In a call with investors on Wednesday, Miguel Stilwell d'Andrade, chief executive officer of EDP Renewables, referred to the uncertainty, describing what has been 'a turbulent few months.' When asked about SouthCoast Wind, he said the €133 million, or $138 million, impairment specific to his company, which was first reported by E&E News, is 'relatively prudent, because it's assuming there is a four-year delay' to the start of construction. He described that as 'the worst-case scenario.' He continued, 'Obviously, given everything that's come out in the last couple of weeks with the executive orders, and asking to review the federal permits, we've decided to just be more prudent around the timing.' He said the power purchase agreements for the project are ready to sign and described the pricing as 'attractive' relative to other recent contracts that had prices of about 15 cents per kilowatt hour. Offshore wind in Cape Cod waters: Vineyard Offshore cuts 50 jobs amid 'market uncertainty.' What it means for Vineyard Wind. One specific way that the company is trying to protect itself is by negotiating provisions in the contracts that factor in possible changes to an important tax credit that was funded by the Inflation Reduction Act, according to Stilwell d'Andrade and other EDP executives. As it stands, developers can qualify for a 30% investment tax credit if they begin construction before Jan. 1, 2026. Stilwell d'Andrade expressed confidence in the long-term outlook for the American market, saying that electric demand is only expected to grow and that renewables are attractive because they offer pricing stability and can be developed more quickly than new gas-burning power plants or nuclear facilities. The Rhode Island Office of Energy Resources, through a spokesman, said it's aware of the write-down but couldn't comment at this time on how a delay to SouthCoast Wind could affect state efforts to comply with mandates in the Act on Climate to curb greenhouse gas emissions. Amanda Barker, clean energy program coordinator with Green Energy Consumers Alliance, said the SouthCoast Wind proposal and other offshore wind projects are essential for energy independence and combatting climate change as well as for supporting grid reliability and the state economy. 'We need to find a way to get these crucial projects over the finish line,' she said. This article originally appeared on The Providence Journal: SouthCoast Wind faces possible 4-year delay under Trump presidency
