Energy prices in Colombia have experienced a considerable rise so far in 2024, almost doubling between January and September. The cost of a kilowatt hour, which was $559 at the beginning of the year, reached $1,033 in September, directly affecting consumers and generating a strong impact on the country’s economy. This rise has been driven mainly by climatic and structural factors in energy production.
One of the main triggers has been the extension of the El Niño phenomenon, which has caused a prolonged drought, affecting the levels of the reservoirs. In Colombia, a large part of the electrical energy comes from hydroelectric sources, which represent close to 70% of the energy matrix. With reservoirs operating at less than 30% of their capacity, hydroelectric generation has been severely limited, forcing the country to rely on thermal plants, which are more expensive to operate.
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The increase in dependence on thermal plants has resulted in a direct increase in energy production costs. These plants, which use fossil fuels, require greater investments in fuel and operations, which has driven up the price per kilowatt. At the same time, energy demand has not decreased, further exacerbating pressure on supply.
In addition to climate effects, the Colombian electricity market has shown price volatility due to the lack of effective mechanisms to mitigate these increases. Although the government has proposed interventions and solutions such as subsidies or price caps, the effects of these measures have not completely stabilized the market, leading to the increase in costs to continue.
This unprecedented increase in energy prices has put both authorities and consumers on alert, who face costs that could continue to rise if current conditions persist.
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