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Practice to policy: a bottom-up analysis of barriers to biogas investments and policy

options in Colombia

May 27, 2021

Content

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1. The energy and climate policy context in Colombia

2. The LAC Bioenergy Community of Practice (BioE CoP)

3. Study of barriers to biogas investments in Colombia

• Objective and approach

• Methodology

• Results

Nationally Determined Contribution improvements from 2015 to 2020

To improve the implementation process we have included

the following elements:

Up to date information

Improved quantification methodology

Mitigation component: The NDC includes quantitative and

qualitative greenhouse gas mitigation measures (including 3 specific

for black carbon) for a total of 148 measures.

Specific actions and identified responsible

First Adaptation Communication

Means of implementation

CLIMATE CHANGE MANAGEMENT

The Water and Sanitation sector the management of the biogas generated by in the landfills and the wastewater management, is one of the pillars of their strategies to reduce the GHG emissions, due to the high percentage of methane.

The mines and energy sector considers the diversification of the energy matrix in Colombia, as one of the strategies to

reduce their GHG emissions. Within this strategy, the participation of the non-

conventional renewable energy sources has a high relevance.

The agricultural sector the strategies are guided to implement of Good-practices regimes within the productive systems and the utilization of organic wastes.

ENERGY TRANSITION

Competitiveness, participation and

power market structure

Then gas’ role within the energetic transition

Decentralization, digitization and

demand management

Increment of the electricity service

coverage

Review of the institutional

and regulatory framework

NATIONAL ENERGY PLAN 2020-2050

• BAT adoption by 2050• Replacement of firewood by

LPG in the rural areas• Current goals of electric

mobility• Change of lamps in the

housing sector

• BAT adoption by 2050• Gas as fuel in massive

transportation and industry• Increased participation of

electricity within the transportation sector

• BAT adoption by 2040• Changes of gas stoves by

induction stoves• None use of firewood in rural

areas• Increased participation of

electricity within the transportation and industry sector

• BAT adoption by 2030• Usage of hydrogen in the

transportation sector• Accelerates renovation of the

fleet of vehicles to technologies of low or zero emissions

• Importation and to non-conventional deposits

• Improvements of the liquid fuels

• Efficiency on the Hydrocarbon sector

• Gas natural importation• Non-conventional renewable

energy sources (off-shore eolic generation)

• Biofuels• Biogas• Thermic plants efficiency

• Geothermal energy• Small nuclear rectors• Inefficient plants phase out

• Green hydrogen• Non-conventional renewable

energy sources.

Aligned with the current trends

Gasification as a step towards the

decarbonization

Start of the economy electrification

Innovation to align the sector to the carbon

neutrality

Scenario I: Updating Scenario II: Upgrading Scenario III: Inflection Scenario IV: Disruption

LAC Bioenergy Community of Practice (BioE CoP)A peer to peer learning network

CoP Group Learning

Country Deep Dives

Regional & global

knowledge dissemination

Objective of the study

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To identify the main risks and barriers to biogas investments in Colombia, andpolicy options to address them, based on the field experience of developers,financiers, experts and other interested parties.

Focusing on residual biomass from agricultural, livestock and agro-industrialproduction.

Team

Coordination: LEDS LAC Secretariat/Bio-E CoP.Ana María Majano and Katherine Bocanegra

Methodological and technical support : SD Strategies, Germany, LEDS GP Energy Working Group - Alexander Ochs and Blanca Loaiza.

Local consultant (Climate Help Desk): Sofía Duarte G.

National counterpart: Colombian Low Emission, Resilient and Adapted Development Strategy; Jonathan Sánchez Rippe and Oscar Galvis.

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Acknowledgment and gratitude✓ Red Colombiana de Digestión

Anaerobia

✓ ASOCAÑA

✓ Centro de investigación de la Caña de Azúcar en Colombia CENICAÑA

✓ AUGURA. Asociación de Bananeros de Colombia.

✓ FEDEPALMA

✓ Centro de Investigación en Palma de Aceite - Cenipalma

✓ FEDEGAN.

✓ FENAVI.

✓ PORK COLOMBIA

✓ Aliar. La Fazenda

✓ Bavaria

✓ Hacienda La Cabaña S.A

✓ Huevos Kikes

✓ Ingenio Mayagúez

✓ Novatio

✓ Biobolsa

✓ Biotec

✓ Ressegas

✓ Davivienda

✓ Bancolombia

✓ Ministerio de Minas y Energía

✓ Ministerio de Ambiente y Desarrollo Sostenible

✓ Ministerio de Vivienda Ciudad y Territorio

✓ Ministerio de Agricultura y Desarrollo Rural

✓ Unidad de Planeación Minero Energética

✓ FENOGE

✓ CREG

✓ ANDESCO

✓ NATURGAS

✓ ICA

✓ Vanti

✓ Vatia

✓ Celcia

Approach

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International studies and best practice

Knowledge and experience of project developers and other stakeholders in the country

Public policy

Bottom up

First step: Mapping biogas production in Colombia

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Using QGIS 3.

Google Streetview

qgis2web(HTML/pop-up)

Web server: InfinityFree,

mapa.epizy.com

Methodology for identifying and prioritizing risks and

barriers to biogas investments in Colombia

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• Design of the table based on UNDP´s DREI (Derisking renewable energyinvestments) methodology

• Identification of potential barriers and policy instruments through anextensive literature review. 11 risk categories and y 41 barriers wereidentified

• Preliminary scoring for Colombia using available information

• Scoring of the risk and barriers by experts from the Ministry of Minesand Energy, the academic sector and other organizations

• Out of the 41 barreras, 19 were considered the most important in thecountry based on the experts scores

• The 19 pre-selected barriers were included in surveys that werecompleted by project developers and other actors involved in biogasProject development

• Statistical analysis of the project developer scores• 18 out of the 19 pre-selected barriers were considered important in the

country by project developers

1. Development of risk and barriers table

2. Pre-selection of the most relevant

barriers

3. Prioritization based on the

experience of project developers

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• Interviews with other actors that are related to the barriersperceived by the developers: regulators, grid operators, financialinstitutions, among others.

• Workshop with government experts from diferente sectors topresent and discuss the prioritized barriers

• Analysis of applicability of potential policy measures to theColombian context

• Development of specific recommendations

• Workshop to discuss the proposed measures with stakeholders

• Preparation of final report

4. Validation of barrierswith other actors

5. Emission of policy recommendations

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Most significant perceived barriers(average score greater tan 4)

• High investment costs (CAPEX)

• Limited experience with biogas projects in financial institutions

• Market perspectives for digestate

• Grid interconection rules

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Medium significance barriers (averagescore between 3 and 4)• Bureaucracy

• Operations

• Operation costs

• Quality, availability and adequation of equipment

• Technical rules

• Labor market

• Lack of information

• Uncertainty (macroeconomic situation)

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Lower significance barriers (average score less than 3)

• Availability of land

• Social resistance to biogas projects

• Barriers related to residual biomass management: availability, quality,

competition for use, and logistics

▪ Colombia has environmental and energy policies and regulations that provide aframework for the development of biogas, but their dispersion makes it difficult forpotential biogas project developers to know them and apply them.

▪ An important issue requiring the development of new policies and regulations is theuse/trade of digestate. This would contribute to financial feasibility of the projects and tocomplete the “circle”.

▪ Regarding financing, which is often mentioned as a barrier, it was found that there arefinancial and resources and instruments in the country that could be used for biogasprojects, but it is necessary to strengthen capacities, both in developers and financiers, tohave more bankable projects.

▪ Knowledge management and capacity building are key to lower the barriers perceived by(actual and potential) biogas developers.

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Key findings

How to eliminate or lower these barriers?

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▪ Policy coherence and coordination among different policy areas related to biogasdevelopment: national biogas program, biogas NAMA, make biogas visible innational and sectoral strategies and goals.

▪ Systematize and disseminate information about existing policy and regulatoryframework

▪ Improve administrative processes

▪ Knowledge management: specialized web page; technical and financial guidesand templates; success stories; spaces and opportunities for peer to peerlearning.

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Recommendations (1)

▪ Capacity building▪ Financing

▪ Technical personnel

▪ Promote energy use of residual biomass

▪ Regulate and promote the use of digestate as fertilizer

▪ Promote biogas R&D and technology adaptation

▪ Promote technology supply

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Recommendations (2)

Next steps

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• Publication and dissemination of the study

• Support implementation of recommendations

• Replicate methodology in other countries/technologies

▪ The methodology allows to consider a wide range of potential risks and barriersbased on international best practice, but to focus policy recommendations onthose that are more relevant for project developers in the national context.

▪ Recommendations must be considered as the starting point for a systematic,concerted policy effort. Disperse interventions may not have the desired impact.

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Two important take aways

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Thank you!https://ledslac.org/comunidades-de-practica/bioenergy/