IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v139y2019icp1111-1119.html
   My bibliography  Save this article

Understanding dynamics and policy for renewable energy diffusion in Colombia

Author

Listed:
  • Arias-Gaviria, Jessica
  • Carvajal-Quintero, Sandra Ximena
  • Arango-Aramburo, Santiago

Abstract

Colombia has committed to reduce greenhouse gas emissions in 20% by 2030 with respect to business-as-usual in the COP21. One policy is the Renewable Energy (RE) law launched in 2014, aiming “to promote the development and use of non-conventional energy sources” with indirect incentives, such as tax reduction or exemptions. Direct incentives, such as price-based, are not included in the law. Experiences in other countries have proven that direct incentives are more efficient than indirect ones to promote RE. The purpose of this study was to evaluate incentives for RE diffusion in Colombia through a simulation model for energy policy recommendations. We tested four incentives: tax reduction, feed-in-tariffs, tradable certificates, and technical subsidies; and four RE sources: small hydro, biomass, wind, solar and geothermal. Simulation results show that a combined scenario using feed-in-tariffs and technical subsidies can boost the deployment of RE, avoiding significant price increases for the final consumer. None of the incentives leads to reaching the RE target, given the growing demand for energy. Complementary policies could focus on improving energy efficiency.

Suggested Citation

  • Arias-Gaviria, Jessica & Carvajal-Quintero, Sandra Ximena & Arango-Aramburo, Santiago, 2019. "Understanding dynamics and policy for renewable energy diffusion in Colombia," Renewable Energy, Elsevier, vol. 139(C), pages 1111-1119.
    • Handle: RePEc:eee:renene:v:139:y:2019:i:c:p:1111-1119
    DOI: 10.1016/j.renene.2019.02.138
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148119303040
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2019.02.138?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Arango, Santiago & Larsen, Erik R., 2010. "The environmental paradox in generation: How South America is gradually becoming more dependent on thermal generation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 2956-2965, December.
    2. Alishahi, E. & Moghaddam, M. Parsa & Sheikh-El-Eslami, M.K., 2012. "A system dynamics approach for investigating impacts of incentive mechanisms on wind power investment," Renewable Energy, Elsevier, vol. 37(1), pages 310-317.
    3. Haas, Reinhard & Resch, Gustav & Panzer, Christian & Busch, Sebastian & Ragwitz, Mario & Held, Anne, 2011. "Efficiency and effectiveness of promotion systems for electricity generation from renewable energy sources – Lessons from EU countries," Energy, Elsevier, vol. 36(4), pages 2186-2193.
    4. Couture, Toby & Gagnon, Yves, 2010. "An analysis of feed-in tariff remuneration models: Implications for renewable energy investment," Energy Policy, Elsevier, vol. 38(2), pages 955-965, February.
    5. Osorio, A.F. & Ortega, Santiago & Arango-Aramburo, Santiago, 2016. "Assessment of the marine power potential in Colombia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 966-977.
    6. Lindman, Åsa & Söderholm, Patrik, 2012. "Wind power learning rates: A conceptual review and meta-analysis," Energy Economics, Elsevier, vol. 34(3), pages 754-761.
    7. Larsen, Erik R. & Dyner, Isaac & Bedoya V., Leonardo & Franco, Carlos Jaime, 2004. "Lessons from deregulation in Colombia: successes, failures and the way ahead," Energy Policy, Elsevier, vol. 32(15), pages 1767-1780, October.
    8. Tooraj Jamasb, 2007. "Technical Change Theory and Learning Curves: Patterns of Progress in Electricity Generation Technologies," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 51-72.
    9. Haas, Reinhard & Panzer, Christian & Resch, Gustav & Ragwitz, Mario & Reece, Gemma & Held, Anne, 2011. "A historical review of promotion strategies for electricity from renewable energy sources in EU countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(2), pages 1003-1034, February.
    10. Ferioli, F. & Schoots, K. & van der Zwaan, B.C.C., 2009. "Use and limitations of learning curves for energy technology policy: A component-learning hypothesis," Energy Policy, Elsevier, vol. 37(7), pages 2525-2535, July.
    11. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    12. Faber, Albert & Valente, Marco & Janssen, Peter, 2010. "Exploring domestic micro-cogeneration in the Netherlands: An agent-based demand model for technology diffusion," Energy Policy, Elsevier, vol. 38(6), pages 2763-2775, June.
    13. Eppstein, Margaret J. & Grover, David K. & Marshall, Jeffrey S. & Rizzo, Donna M., 2011. "An agent-based model to study market penetration of plug-in hybrid electric vehicles," Energy Policy, Elsevier, vol. 39(6), pages 3789-3802, June.
    14. Kowalska-Pyzalska, Anna & Maciejowska, Katarzyna & Suszczyński, Karol & Sznajd-Weron, Katarzyna & Weron, Rafał, 2014. "Turning green: Agent-based modeling of the adoption of dynamic electricity tariffs," Energy Policy, Elsevier, vol. 72(C), pages 164-174.
    15. Palmer, J. & Sorda, G. & Madlener, R., 2015. "Modeling the diffusion of residential photovoltaic systems in Italy: An agent-based simulation," Technological Forecasting and Social Change, Elsevier, vol. 99(C), pages 106-131.
    16. Toka, Agorasti & Iakovou, Eleftherios & Vlachos, Dimitrios & Tsolakis, Naoum & Grigoriadou, Anastasia-Loukia, 2014. "Managing the diffusion of biomass in the residential energy sector: An illustrative real-world case study," Applied Energy, Elsevier, vol. 129(C), pages 56-69.
    17. Frank M. Bass, 1969. "A New Product Growth for Model Consumer Durables," Management Science, INFORMS, vol. 15(5), pages 215-227, January.
    18. Jamasb, T. & Köhler, J., 2007. "Learning Curves For Energy Technology and Policy Analysis: A Critical Assessment," Cambridge Working Papers in Economics 0752, Faculty of Economics, University of Cambridge.
    19. Gary, Shayne & Larsen, Erik Reimer, 2000. "Improving firm performance in out-of-equilibrium, deregulated markets using feedback simulation models," Energy Policy, Elsevier, vol. 28(12), pages 845-855, October.
    20. Schoots, K. & Kramer, G.J. & van der Zwaan, B.C.C., 2010. "Technology learning for fuel cells: An assessment of past and potential cost reductions," Energy Policy, Elsevier, vol. 38(6), pages 2887-2897, June.
    21. Lund, Peter, 2006. "Market penetration rates of new energy technologies," Energy Policy, Elsevier, vol. 34(17), pages 3317-3326, November.
    22. Olaya, Yris & Arango-Aramburo, Santiago & Larsen, Erik R., 2016. "How capacity mechanisms drive technology choice in power generation: The case of Colombia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 563-571.
    23. Jimenez, Maritza & Franco, Carlos J. & Dyner, Isaac, 2016. "Diffusion of renewable energy technologies: The need for policy in Colombia," Energy, Elsevier, vol. 111(C), pages 818-829.
    24. Frank M. Bass, 2004. "Comments on "A New Product Growth for Model Consumer Durables The Bass Model"," Management Science, INFORMS, vol. 50(12_supple), pages 1833-1840, December.
    25. Rao, K. Usha & Kishore, V.V.N., 2010. "A review of technology diffusion models with special reference to renewable energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(3), pages 1070-1078, April.
    26. Popp, David & Hascic, Ivan & Medhi, Neelakshi, 2011. "Technology and the diffusion of renewable energy," Energy Economics, Elsevier, vol. 33(4), pages 648-662, July.
    27. Purohit, Pallav & Kandpal, Tara C., 2005. "Renewable energy technologies for irrigation water pumping in India: projected levels of dissemination, energy delivery and investment requirements using available diffusion models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 9(6), pages 592-607, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marrero-Trujillo, Verónica & Arias-Gaviria, Jessica & Arango-Aramburo, Santiago & Larsen, Erik R., 2023. "Gamification model for communicating and evaluating renewable energy planning," Utilities Policy, Elsevier, vol. 84(C).
    2. Perez, Alex & Garcia-Rendon, John J., 2021. "Integration of non-conventional renewable energy and spot price of electricity: A counterfactual analysis for Colombia," Renewable Energy, Elsevier, vol. 167(C), pages 146-161.
    3. Montoya-Duque, Laura & Arango-Aramburo, Santiago & Arias-Gaviria, Jessica, 2022. "Simulating the effect of the Pay-as-you-go scheme for solar energy diffusion in Colombian off-grid regions," Energy, Elsevier, vol. 244(PB).
    4. Ding, Hao & Zhou, Dequn & Zhou, P., 2020. "Optimal policy supports for renewable energy technology development: A dynamic programming model," Energy Economics, Elsevier, vol. 92(C).
    5. Ricardo Moreno & Sergio A. Cantillo & Lilian A. Carrillo-Rodriguez, 2021. "Risk Analysis of Firm Energy Coverage in Colombia in the Medium Term," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 220-226.
    6. Milad Shadman & Mateo Roldan-Carvajal & Fabian G. Pierart & Pablo Alejandro Haim & Rodrigo Alonso & Corbiniano Silva & Andrés F. Osorio & Nathalie Almonacid & Griselda Carreras & Mojtaba Maali Amiri &, 2023. "A Review of Offshore Renewable Energy in South America: Current Status and Future Perspectives," Sustainability, MDPI, vol. 15(2), pages 1-34, January.
    7. Fang, Yujuan & Wei, Wei & Mei, Shengwei, 2022. "How dynamic renewable portfolio standards impact the diffusion of renewable energy in China? A networked evolutionary game analysis," Renewable Energy, Elsevier, vol. 193(C), pages 778-788.
    8. Yessenia Martínez-Ruiz & Diego Fernando Manotas-Duque & Juan Carlos Osorio-Gómez & Howard Ramírez-Malule, 2022. "Evaluation of Energy Potential from Coffee Pulp in a Hydrothermal Power Market through System Dynamics: The Case of Colombia," Sustainability, MDPI, vol. 14(10), pages 1-19, May.
    9. Arias-Gaviria, Jessica & Arango-Aramburo, Santiago & Lamadrid L, Alberto J., 2022. "The effects of high penetrations of renewable energy sources in cycles for electricity markets: An experimental analysis," Energy Policy, Elsevier, vol. 166(C).
    10. Henao, Felipe & Dyner, Isaac, 2020. "Renewables in the optimal expansion of colombian power considering the Hidroituango crisis," Renewable Energy, Elsevier, vol. 158(C), pages 612-627.
    11. López, Andrea Ruíz & Krumm, Alexandra & Schattenhofer, Lukas & Burandt, Thorsten & Montoya, Felipe Corral & Oberländer, Nora & Oei, Pao-Yu, 2020. "Solar PV generation in Colombia - A qualitative and quantitative approach to analyze the potential of solar energy market," Renewable Energy, Elsevier, vol. 148(C), pages 1266-1279.
    12. Jankowska, Barbara & Staliński, Adam & Trąpczyński, Piotr, 2021. "Public policy support and the competitiveness of the renewable energy sector – The case of Poland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 149(C).
    13. Thais Faria Costa & Ivan Felipe Silva Santos & Geraldo Lúcio Tiago Filho & Regina Mambeli Barros & Rosana Teixeira Miranda, 2021. "Optimum hydropower potential study on nine Brazilian drainage basins using a numerical algorithm," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(2), pages 1729-1758, February.
    14. John J. García Rendón & Alex F. Pérez-Libreros, 2019. "El precio spot de la electricidad y la inclusión de energía renovable no convencional: evidencia para Colombia," Documentos de Trabajo CIEF 17393, Universidad EAFIT.
    15. Arango-Aramburo, Santiago & Turner, Sean W.D. & Daenzer, Kathryn & Ríos-Ocampo, Juan Pablo & Hejazi, Mohamad I. & Kober, Tom & Álvarez-Espinosa, Andrés C. & Romero-Otalora, Germán D. & van der Zwaan, , 2019. "Climate impacts on hydropower in Colombia: A multi-model assessment of power sector adaptation pathways," Energy Policy, Elsevier, vol. 128(C), pages 179-188.
    16. Xin-gang, Zhao & Wei, Wang & Jieying, Wang, 2022. "The policy effects of demand-pull and technology-push on the diffusion of wind power: A scenario analysis based on system dynamics approach," Energy, Elsevier, vol. 261(PA).
    17. Hidayatno, Akhmad & Setiawan, Andri D. & Wikananda Supartha, I Made & Moeis, Armand O. & Rahman, Irvanu & Widiono, Eddie, 2020. "Investigating policies on improving household rooftop photovoltaics adoption in Indonesia," Renewable Energy, Elsevier, vol. 156(C), pages 731-742.
    18. Guillermo Valencia Ochoa & Jose Nunez Alvarez & Carlos Acevedo, 2019. "Research Evolution on Renewable Energies Resources from 2007 to 2017: A Comparative Study on Solar, Geothermal, Wind and Biomass Energy," International Journal of Energy Economics and Policy, Econjournals, vol. 9(6), pages 242-253.
    19. Miraj Ahmed Bhuiyan & Jaehyung An & Alexey Mikhaylov & Nikita Moiseev & Mir Sayed Shah Danish, 2021. "Renewable Energy Deployment and COVID-19 Measures for Sustainable Development," Sustainability, MDPI, vol. 13(8), pages 1-15, April.
    20. García-García, Jersson & Sarmiento-Ariza, Yennifer & Campos-Rodríguez, Lizeth & Rey-López, Juan & Osma-Pinto, German, 2023. "Evaluation of tax incentives on the financial viability of microgrids," Applied Energy, Elsevier, vol. 329(C).
    21. Mostafaeipour, Ali & Bidokhti, Abbas & Fakhrzad, Mohammad-Bagher & Sadegheih, Ahmad & Zare Mehrjerdi, Yahia, 2022. "A new model for the use of renewable electricity to reduce carbon dioxide emissions," Energy, Elsevier, vol. 238(PA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arias-Gaviria, Jessica & Larsen, Erik R. & Arango-Aramburo, Santiago, 2018. "Understanding the future of Seawater Air Conditioning in the Caribbean: A simulation approach," Utilities Policy, Elsevier, vol. 53(C), pages 73-83.
    2. Marc Baudry & Clément Bonnet, 2019. "Demand-Pull Instruments and the Development of Wind Power in Europe: A Counterfactual Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 385-429, June.
    3. Marc Baudry & Clément Bonnet, 2016. "Demand pull isntruments and the development of wind power in Europe: A counter-factual analysis," Working Papers 1607, Chaire Economie du climat.
    4. Arias-Gaviria, Jessica & van der Zwaan, Bob & Kober, Tom & Arango-Aramburo, Santiago, 2017. "The prospects for Small Hydropower in Colombia," Renewable Energy, Elsevier, vol. 107(C), pages 204-214.
    5. Santhakumar, Srinivasan & Meerman, Hans & Faaij, André, 2021. "Improving the analytical framework for quantifying technological progress in energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    6. Hidayatno, Akhmad & Jafino, Bramka Arga & Setiawan, Andri D. & Purwanto, Widodo Wahyu, 2020. "When and why does transition fail? A model-based identification of adoption barriers and policy vulnerabilities for transition to natural gas vehicles," Energy Policy, Elsevier, vol. 138(C).
    7. Rubin, Edward S. & Azevedo, Inês M.L. & Jaramillo, Paulina & Yeh, Sonia, 2015. "A review of learning rates for electricity supply technologies," Energy Policy, Elsevier, vol. 86(C), pages 198-218.
    8. Castaneda, Monica & Franco, Carlos J. & Dyner, Isaac, 2017. "Evaluating the effect of technology transformation on the electricity utility industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 341-351.
    9. Dhirasasna, NiNa & Sahin, Oz, 2021. "A system dynamics model for renewable energy technology adoption of the hotel sector," Renewable Energy, Elsevier, vol. 163(C), pages 1994-2007.
    10. Montoya-Duque, Laura & Arango-Aramburo, Santiago & Arias-Gaviria, Jessica, 2022. "Simulating the effect of the Pay-as-you-go scheme for solar energy diffusion in Colombian off-grid regions," Energy, Elsevier, vol. 244(PB).
    11. Thomassen, Gwenny & Van Passel, Steven & Dewulf, Jo, 2020. "A review on learning effects in prospective technology assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 130(C).
    12. Odam, Neil & de Vries, Frans P., 2020. "Innovation modelling and multi-factor learning in wind energy technology," Energy Economics, Elsevier, vol. 85(C).
    13. Bossink, Bart, 2020. "Learning strategies in sustainable energy demonstration projects: What organizations learn from sustainable energy demonstrations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    14. Scheller, Fabian & Johanning, Simon & Bruckner, Thomas, 2019. "A review of designing empirically grounded agent-based models of innovation diffusion: Development process, conceptual foundation and research agenda," Contributions of the Institute for Infrastructure and Resources Management 01/2019, University of Leipzig, Institute for Infrastructure and Resources Management.
    15. Xin-gang, Zhao & Wei, Wang & Jieying, Wang, 2022. "The policy effects of demand-pull and technology-push on the diffusion of wind power: A scenario analysis based on system dynamics approach," Energy, Elsevier, vol. 261(PA).
    16. Hayward, Jennifer A. & Graham, Paul W., 2013. "A global and local endogenous experience curve model for projecting future uptake and cost of electricity generation technologies," Energy Economics, Elsevier, vol. 40(C), pages 537-548.
    17. Toka, Agorasti & Iakovou, Eleftherios & Vlachos, Dimitrios & Tsolakis, Naoum & Grigoriadou, Anastasia-Loukia, 2014. "Managing the diffusion of biomass in the residential energy sector: An illustrative real-world case study," Applied Energy, Elsevier, vol. 129(C), pages 56-69.
    18. Lee, Chul-Yong & Huh, Sung-Yoon, 2017. "Forecasting the diffusion of renewable electricity considering the impact of policy and oil prices: The case of South Korea," Applied Energy, Elsevier, vol. 197(C), pages 29-39.
    19. Strupeit, Lars, 2017. "An innovation system perspective on the drivers of soft cost reduction for photovoltaic deployment: The case of Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 273-286.
    20. Schauf, Magnus & Schwenen, Sebastian, 2021. "Mills of progress grind slowly? Estimating learning rates for onshore wind energy," Energy Economics, Elsevier, vol. 104(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:139:y:2019:i:c:p:1111-1119. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.