Law 1665 of 2013 (the New Renewable Energy Law (REL)) was adopted in April 2014. The REL approved the International Renewable Energy Agency Statute as an attempt to promote the adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar, and wind energy, in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth.
The Financial Support Fund for Energy Provision in Non- Interconnected Zones (FAER) was created in 2000 by Law 633 of 2000. This fund has proven to be an important tool for the financing of projects in areas not connected to the national grid. The fund focuses on energy expansion using both renewable and non-renewable energy sources, and has become an important instrument for financing projects in these regions. Another significant aspect of Law 633 is the creation of the Fund for Non-Conventional Energies (FENOGE), which will help to finance initiatives in nonconventional energy with public and international resources.
Investors in renewable energy projects can obtain a 50 per cent annual deduction of taxable income for the first five years following an investment. Equipment and machinery are excluded from VAT and, if such equipment and machinery is imported, customs duties are exempt.
Finally, the government has regulated the self-generation of energy through Decree 2469 of 2014. Legal or natural persons will be considered self-generators if the energy they produce is for their own consumption and if they do not use national transmission or distributions systems. However, if there are surpluses, self-generators can deliver energy to the national network in accordance with the regulation established by the Energy and Gas Regulation Commission (CREG). Large-scale self-generators must be represented in the wholesale electric market by a distribution agent, who will market the surplus to the National Network. In addition, large-scale self-generators have to enter into a backup contract with the network operator which sets out the fees and charges for the energy distribution services performed by the operator.
It is important to mention that all self-generators will be considered as large scale producers until the CREG establishes criteria to determine which self-generators will be deemed large scale.
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Publish date : 2024-03-04 02:46:50
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