2024-03-14 15:27:53
The recent El Niño phenomenon has generated concerns in the Colombian energy sector, with the notable decrease in the levels of the country’s water reservoirs. Since this climate phenomenon began on November 4, 2023, the level of the reservoirs has decreased drastically, going from 112.73% to the current 38.60%. This decline represents a drop of 65.75%, approximately 74.13 percentage points, in less than four and a half months.
These worrying figures, however, have not resulted in a disproportionate increase in energy prices on the stock market. Despite some fluctuations, the average price on the stock market has experienced an increase of $91.59/kWh since the beginning of the phenomenon. Even with the peaks recorded, such as last December 11 when the price reached $948.84/kWh, the energy market has remained relatively stable.
According to Camila Orbegozo, director of sector analysis and sustainability at Corficolombiana, energy prices on the stock market are still 50% below the scarcity price, which provides a certain degree of peace of mind. However, she warns about the recent acceleration in long-term contract prices, reflecting the worsening water situation in the country.
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Analysts point out that concern will grow if the drop in reservoir levels reaches 30%, which could occur towards the beginning of April if the current trend persists. Currently, the level of water replacement is below 50% of the average, indicating a critical situation that could worsen before the phenomenon ends.
In February, the weighted average price on the stock market increased slightly compared to the previous month, reaching $573.22/kWh. During this period, 68.07% of the energy was generated through renewable sources, mainly hydroelectric, while the remaining 31.93% came from thermal plants.
With uncertainty about how the situation will evolve in the coming months, the energy sector is paying attention to the behavior of reservoirs and energy prices amid the El Niño phenomenon, which is expected to come to an end around mid-April.
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