As uncertainty grows in the electricity sector due to the brief announcement by President Gustavo Petro to assume the regulation of public services, these days it is remembered that 30 years ago Colombia was ending 11 months of darkness that he had to face due to a ‘perfect storm’ that was formed after a succession of events and bad decisions during the previous years.
Next Tuesday will mark the 30th anniversary of the end of the worst electricity rationing in the country, while a debate is being faced on the possibility raised by the President of change the functioning of the institutionality created just after the blackoutin order to prevent it from happening again.
(Also read: GEB and Enel confirm risk of blackout in Bogotá due to opposition to key projects)
Likewise, the disagreements within the same government that arose on the oil issue and led to the departure of the Vice Minister of Energy Belizza Ruiz led to warnings about the risk of blackouts in Bogotá and other areas, which were followed by similar statements by the president of Grupo Energía de Bogotá (GEB), Juan Ricardo Ortega (see next page).
The rationing between March 2, 1992 and February 7, 1993 was the trigger to completely transform the electricity sector in the country.
After the announcement of the then president, César Gaviria, Bogota was left without power nine hours a day; in the Caribbean region it was ten hours, and in San Andrés y Providencia the penumbra reigned for 18 hours.
everyday life changed
This moment brought back gasoline power plants and candles. The calls to save water, with the ‘Close the key’ campaign, did not give the expected results and more drastic measures were taken, such as advance the clocks one hour to take better advantage of the sunlightan idea of the then Minister of Foreign Trade, Juan Manuel Santos, which gave way to ‘La Hora Gaviria’.
Since May 2, 1992, and for eight months, at 5 in the morning the clocks have marked 6, and children must get up in the dark to bathe in cold water to go to school, just like adults to go to school. their works.
The planes at nightfall were no longer watching television because, seeking to lower electricity consumption, the houses will remain without light. The programmers had to run their prime time slot for 10 pm Families turned to board games and the radio to get through those nights. For this reason, La luciérnaga was also born, a program that continues 30 years later.
(Also read: Energy rates: despite measures, nine companies reported increases)
What went wrong?
The best ideas come from a debate and not from a single position that the Government has
The perfect storm was created for the country to shut down. Julián Rojas, a professor at the Universidad del Rosario and an expert in regulatory issues, comments that in the years prior to 1992 Colombia faced high inflation and a strong devaluation of the peso against the dollar. Also, energy rates were frozen for a while.
This led to ISA and other companies being controlled 100 percent by the State and that they had their charge in the generation and transmission of energy, begin to have serious financial problems and they could not make the necessary investments to expand the networks and do the maintenance required so that plants, such as the thermal ones, could enter to support hydroelectric generation, as expected.
By 1992, the debt of the electricity sector exceeded 5,000 million dollars. Its high indebtedness weighed 40 percent of the country’s external debtwhich was added to a financial insolvency and great failures in administrative management that prevented it from responding to the crisis.
In addition, that of a extreme drought due to the El Niño phenomenon it left the country without water to generate energy, which aggravated the current situation and was the trigger for rationing, says Alejandro Castañeda, executive director of the National Association of Generating Companies (Andeg).
Thirty years ago, 78 percent of the energy consumed in the country was generated by hydroelectric plants. When summer began in December 1991, the level of the reservoirs was at 39 percent, and in just four months it dropped to 3.75 percent (April 30, 1992).
also influenced the delay of more than five years and cost overruns at the El Guavio hydroelectric plant, today the largest in the country with 1,260 megawatts of capacity. Experts say that if a time had entered, and not in December 1992, the blackout would have been avoided.
The 180 degree turn
Power rationing produced major changes in the electricity sector. Laws 142 (public services) and 143 (electricity law) of 1994 completely reformed this sector and the door was opened to private investment.
Some generators and electricity companies were sold to relieve the State of the burden that providing the service meant, and the Capacity Charge (now Reliability Charge) was born, since the sector assumed the responsibility of guaranteeing the energy supply even in critical hydrology conditions. .
Today, 66.8 percent of electricity is generated with water; thermals weigh 31.5 percent in the matrix; solar plants, 1.49 percent, and wind, 0.09 percent, according to XM.
«The lessons of this experience led us to develop a legal framework based on a stable institutional framework with entities responsible for regulating, supervising and planning a sector that needs clear rules to be able to attract the necessary investment that guarantees an efficient, reliable and clean service provision, just as we have it”, says Natalia Gutiérrez, president of the Colombian Association of Electric Power Generators (Acolgén).
Meanwhile, Castañeda stressed that the turnaround led the State to focus on the role it has today, which is the definition of public policy, regulation, surveillance and control of the electric power service.
After this blackout, the entire institutional framework of the sector was born: the Energy and Gas Regulation Commission (Creg) to assume the regulatory part; the Mining and Energy Planning Unit (Upme), for system planning, and the Superintendency of Residential Public Services, for surveillance and control. Likewise, the sector was divided into several links: generation, transmission, distribution and commercialization of energy.
(Also read: ‘Bogotá, Cundinamarca and Meta are not at risk of blackout’, says the Government)
industry resistance
It is crucial to avoid non-technical changes and signals that can generate uncertainty that lead the system to regress
Union leaders assure that, thanks to these reforms, rationing has been avoided with the arrival of new El Niño fuerte phenomena, such as that of 1998, 2009-2010 and 2015-2016.
The most recent one came very close to putting the country back in the darksince it has been the most critical after 1992. A prolonged summer led to the level of the reservoirs reaching over 24 percent of their total capacity by April 2016 and the price of energy on the stock market to rise to more than 1,500 pesos per kilowatt hour.
Added to this was a fire at the Guatapé hydroelectric plant, which took it out of operation for several months, and the difficult financial situation faced by thermal plants such as Termocandelaria, since the maximum price paid for generating energy (scarcity price) was below of its costs. This was corrected and months later the Creg changed the methodology to calculate the value.
The ‘Turn off pays’ campaign, which ran for several months, was the great ally for former President Juan Manuel Santos to announce on April 2, 2016 that the possibility of rationing was ruled outsomething that countries like Venezuela, Panama, Ecuador or Brazil did not achieve.
«What this shows is the flexibility that regulation has to understand a problem and find a solution quickly,» said Castañeda.
For this reason, it is considered important to maintain a robust institutional framework. «If at the end of the day adjustments are made, you have to look at what type they are so as not to end up leaving users due to changes that can be worked on from the current regulation and institutional framework. The most expensive energy is the one you don’t have«, he added.
Meanwhile, Rojas assured that the best thing is for regulation to be in the hands of people who, based on their experience, can make these decisions, in consensus with the Government, because the ministries of Finance and Mines and Energy and the Ministry of Finance have a voice and vote in the CREG. National Planning Department. «I think that the best ideas come from a debate and not from a single position that the government has,» he said.
While the president of Acolgén stated: «It is crucial to avoid non-technical changes and signs that could generate uncertainty that leads the system to regress everything that has been built in the 30 years of operation of this design”.
