Author: Leoncio Montemayor, Solarplaza
With a supportive government, tax incentives and the upcoming auctions, Colombia is set to become one of the hottest markets in Latin America. How is Jinko positioned in Colombia and where do you see the biggest opportunity for growth?
JinkoSolar has been one of the few PV module manufacturers to really bet on Colombia’s PV market potential some 4 years ago when we started establishing a local team. In 2018, JinkoSolar reached an impressive +90% market share in Colombia, which involved supplying almost all utility-scale plants and most of the distributed generation projects. We are definitely ready to continue providing our comprehensive service and high-quality products for the benefit of all our customers. We are very proud to be part of this history, and we think that this upcoming auction will be an important milestone to keep showing investors and power producers that Jinko is committed to providing the best solutions for their projects.
After a failed first attempt and the learnings that this generated, the second auction seems to be on the right path. What are the expectations of Jinko in the auction? Is Jinko taking an active role in this second round?
Our expectation is that the auction will probably be dominated by companies who offer high-quality bifacial technology and it's likely we will see very competitive prices.
As PV module manufacturer, Jinko’s role is to provide our customers with high quality, high efficiency, and highly reliable products that can provide project developers “the edge” they need to make the most competitive offer possible. This definitely means that developers need to consider which is the best type of technology, service, and support they need for the most competitive Levelized Cost Of Electricity (LCOE) possible for the entire period of the PPA. In this sense, Jinko’s value proposal is definitely differentiating. Having the largest supporting team in Colombia, more than 5GW delivered in LATAM and having products like the SWAN bifacial module with transparent back sheet or modules with power ratings over 400W with more than 20% efficiency at all-time low prices, means these projects can rely on a great solution to have the best LCOE at the lowest risk possible.
Do you think that the auctions will become the main mechanism to procure renewable energy in Colombia or do you see a future post-auction?
Colombia has a real market, many end-users, investors and power providers are looking into wind and solar projects as highly profitable investments to have very competitive energy prices and a more diversified and clean energy matrix. In this sense, we expect that Colombia will continue doing renewable energy projects in all segments of the chain: DG projects, private PPAs, Merchant projects, and probably more auctions. It will be a combination of all.
The rise of bifacial module is taking the PV world by storm. What is your particular experience with bifacial modules and do you expect them to play a big role in Colombia?
Definitely bifacial technology has become a major trend worldwide, especially for utility-scale projects. We do think that reaching energy gains from 5% up to 15% is definitely possible in Colombia with bifacial modules. The greatest news for developers is that the increase in CAPEX is heavily compensated by this extra energy gain which will at the end lead to having the projects with the lowest cost of energy possible.
JinkoSolar is leading the innovation and most effective bifacial solutions by having our Bifacial SWAN module. This is a +400W Half Cell, Bifacial module, that is manufactured with a high-performance transparent back sheet that is provided by our partner Dupont. This allows projects to be easily installed and save money on the BOS, O&M and installation costs. All of this without sacrificing quality. Actually, our warranty with this solution is improved over the equivalent monofacial product because of the highly reliable back sheet.
Besides auctions and utility-scale plants, distributed generation and C&I projects are very prevalent in Colombia. What do you think will have a higher share in the energy mix in the future, utility-scale or distributed generation?
The DG Market in Colombia has very interesting potential, as the country is big and has regions that are not connected to the national grid. Here we see that solar, with the upbringing of cheaper new storage technologies, will become a real solution to their needs. On the other hand, the utility-scale project pipeline in Colombia accumulated more than 6GW in a very short period of time. Many of these will probably never be built, but the interest and the potential are there.
We see that both markets will continue growing at very important double-digit rates in the short and mid-term.
The cost of batteries is plummeting around the world, making it feasible in many markets to already combine solar with storage. Do you think it’s possible to connect solar with storage in Colombia? Why?
As mentioned, solar+storage will become more and more feasible by the year and this combination will likely be growing at exponential rates very soon. With many areas without national grid interconnection, Colombia can definitely benefit a lot from this technological evolution. Also, projects on the DG market or utility-scale projects will take advantage of the flexibility of short-time storage, peak-shaving, and grid-supporting services that batteries will start providing to the already extremely competitive solar projects.
Colombia has a high dependence on hydropower and even though it is a clean source of energy, it is still not without its issues. A case in point is the Hidroituango project which has been delayed due to landslides and heavy rainfall. Colombia is also highly susceptible to climate change, most notably by El Niño phenomenon which can lead to dry seasons, leaving dams empty. What is the future of hydropower in Colombia and where does solar fit in?
Hydro projects will still be the base of the energy matrix of Colombia and other similar rainy countries in the region. It was a good solution so far, it had to be exploited, but Colombia cannot only rely on hydro anymore. Climate change, long development and construction times and increasing risks have shown another way is needed. Fortunately, non-conventional renewable energy, like wind and solar PV, is now a real, secure and profitable solution to diversify the energy matrix. Solar has shown to be now the cheapest energy source you can find worldwide, with lower production costs than any other generation technology. The benefits don't stop there as development and construction times are very fast, risks are relatively low and the technology keeps improving and becoming more profitable year after year.
What essential difference do you see between working in Colombia and operating in other markets?
Let’s put it another way: even though Colombia has been a relative latecomer to the renewable energy trend in LATAM, the country now has the opportunity to apply all the lessons learned in other countries to be more successful in its implementation of policy and conditions. Technology-wise, this is the moment where, for example, developers can get the highest efficiency and most reliable products that Jinko offers at the most competitive prices, ensuring that the cost of energy is the lowest they will get out of any possible generation technology.
Final prediction question… how much solar capacity do you think will be awarded in this year’s auction and at what prices?
Solar will probably be dominating the auction but Wind projects might also become close. We hope to see around 0.7-1 GW of Solar PV projects awarded.