Fiscal incentives impact for RETs investments in Colombia

Castillo-Ramírez, Alejandro; Mejía-Giraldo, Diego; Molina-Castro, J. D.

doi:10.1080/15567249.2016.1276648

Cited by 20 publications

(13 citation statements)

References 5 publications

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“…By doing so, the joint effects of price uncertainty and ITA will eventually assist decision-making processes aimed to determine in which direction expand the generation system of the GENCO. Part of the mathematical models presented in this section is adapted from [22,43].…”

Section: Mathematical Conceptualization Of Fiscal Incentivesmentioning

confidence: 99%

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Measuring Financial Impacts of the Renewable Energy Based Fiscal Policy in Colombia under Electricity Price Uncertainty

Castillo-Ramírez

Mejía-Giraldo

2021

Sustainability

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This paper analyses the financial implications, from the point of view of an investor in renewable energy, which sells the energy for an uncertain price of electricity and decides to take advantage of the Colombian tax policy over the renewable energy. The policy, known as Investment Tax Allowance (ITA), encourages installation of renewable projects in a country traditionally dominated by hydro power. Price is modeled as a non-stationary autoregressive stochastic process with normally distributed error terms. Costs, and uncertain revenue and taxes are considered to assess the financial impact on a solar project when the policy is implemented. Since impact varies according to project ownership, two cases are evaluated: a generation company (GENCO-1) that only owns the solar project; and, an existent generation company (GENCO-2) that owns a portfolio of projects. Results indicate that if ITA is applied, it is likely that the GENCO-1 cannot take the full advantage of the incentive, as opposed to the GENCO-2. Although this policy might not satisfy planner objectives since it does not guarantee the construction of significantly high capacity of new renewable energy projects, it definitely represents an attractive mechanism to decrease tax obligations at the GENCO-2 level. Finally, a theoretical analysis shows that investment cost affects the mean of the present value; whereas tax rates impacts both its mean and standard deviation.

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Section: Mathematical Conceptualization Of Fiscal Incentivesmentioning

confidence: 99%

“…This process is performed for every year in the 2000-2019 period. Data of annual average historical electricity prices and data of ten thousand random samples of future electricity prices are available online in reference [48]. Both data processing and simulation codes were written in R [49].…”

Section: Historical Electricity Market Price In Colombiamentioning

confidence: 99%

Measuring Financial Impacts of the Renewable Energy Based Fiscal Policy in Colombia under Electricity Price Uncertainty

Castillo-Ramírez

Mejía-Giraldo

2021

Sustainability

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“…This value depends on the necessities and characteristics of the users of the select location. The interest rate considered in this work is 8.08% taken in [25].…”

Section: System Inputsmentioning

confidence: 99%

Methodology for Sizing Hybrid Battery-Backed Power Generation Systems in Off-Grid Areas

Arraez-Cancelliere¹,

Muñóz-Galeano²,

López-Lezama³

2020

Wind Solar Hybrid Renewable Energy System

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In developing countries, rural electrification in areas with limited or no access to grid connection is one of the most challenging issues for governments. These areas are partially integrated with the electrical grid. This poor electricity distribution is mainly due to geographical inaccessibility, rugged terrains, lack of electrical infrastructure, and high required economic investment for installing large gridconnected power lines over long distances to provide electricity for regions with a low population. On the other hand, rapid depletion of fossil fuel resources on a global scale and progressive increase of energy demand and fuel price are other motives to reduce the reliance on fossil fuels. Hybrid renewable energy system (HRES) can be a suitable option for such remote areas. The objective of this chapter is to develop a methodology for sizing hybrid power generation systems (solardiesel), battery-backed in non-interconnected zones, which minimizes the total cost and maximizes the reliability of supply using particle swarm optimization (PSO). The proposed methodology assists the sizing and designing process of an HRES for an off-grid area minimizing the cost of energy (COE) and maximizing the reliability of the system. Economic incentives offered by the Colombian government are considered in the model.

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“…See references (Reichelstein & Yorston, 2013;Comello & Reichelstein, 2016;Castillo, Mejía & Molina, 2017). In this work, we adapt the approach of Castillo et al (2017) since it already incorporates fiscal incentives impact on RETs in Colombia. Also, this approach allows us to implement the cost breakdown methodology proposed in this paper.…”

Section: Adapted Lcoe Modelmentioning

confidence: 99%

Large-scale solar PV LCOE comprehensive breakdown methodology

Ramírez¹,

Mejía-Giraldo²,

Muñóz-Galeano³

2017

CT&F Cienc. Tecnol. Futuro

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T his paper presents a breakdown cost methodology to evaluate Levelized Costs of Electricity for large-scale Photovoltaic (PV) plants. The breakdown is based on a comprehensive taxonomy to evaluate Investment Costs (IC) and Operation and Maintenance (O&M) expenditures. We added an IC disaggregation level, called elements, on top of the five-component breakdown of the Energy Information Administration (EIA). In addition, a novel structure for disaggregating O&M costs is also proposed. The methodology is evaluated over a 20-MW and a 150-MW PV power plant hypothetically placed in the municipality of Uribia (Guajira Colombia). Also deterministic sensitivity analysis based on discount rate (WACC, Weighted Average Capital Cost), energy generated, O&M costs and IC is performed to aid investors in their decisions. ABSTRACTHow to cite: Castillo-Ramírez, A., Mejía-Giraldo, D., & Muñoz-Galeano, N. (2017 118E ste artigo apresenta uma metodologia para avaliar os custos nivelados da eletricidade (Levelized Cost of Electricity-LCOE), em plantas fotovoltaicas (Photovoltaic -PV) em grande escala. Para esse propósito se propõe uma desagregação detalhada dos LCOE a partir de uma rigorosa taxonomia que avalia os Custos de Investimento (IC, por suas siglas em inglês) e as Despesas de Operação (Operations and Maintenance -O&M). Partindo da estrutura da Administração da Informação Energética (Energy Information Administration -EIA) que desagrega os IC em cinco componentes, adicionamos outro nível de desagregação chamado de "elementos". Também é apresentada uma nova estrutura para desagregar os custos de O&M. A metodologia é avaliada em plantas PV de 20MW e 150 MW PV hipoteticamente localizadas no município de Uribia (Guajira -Colômbia). Da mesma forma, desenvolve-se uma análise de sensibilidade determinística empregando fatores como o Custo Médio ponderado de Capital (Weighted Average Capital Cost -WACC), a energia produzida, as despesas de O&M e os IC para viabilizar as decisões dos investidores. E ste artículo presenta una metodología para evaluar los costos nivelados de la electricidad (Levelized Cost of Electricity) LCOE , en plantas fotovoltaicas (Photovoltaic -PV) a gran escala. Para ello se propone una desagregación detallada de los LCOE a partir de una taxonomía rigurosa que evalúa los Costos de Inversión (Investment Cost -IC )y los Gastos de Operación (Operation and Maintenance -O&M). Partiendo de la estructura de la Administración de Información Energética (Energy Information Administration -EIA) que desglosa los IC en cinco componentes, hemos añadido un nivel adicional de desagregación denominado elementos. Asimismo, una nueva estructura para desagregar los costos de O&M es presentada. La metodología es evaluada en plantas PV de 20 MW y 150 MW PV hipotéticamente ubicadas en el municipio de Uribia (Guajira Colombia). También se desarrolla un análisis de sensibilidad determinístico usando factores como el Costo Promedio Ponderado de Capital (WACC -Weighted Average Capital Cost), la energía producida, los gastos de O&M y los ...

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Fiscal incentives impact for RETs investments in Colombia

Cited by 20 publications

References 5 publications

Measuring Financial Impacts of the Renewable Energy Based Fiscal Policy in Colombia under Electricity Price Uncertainty

Measuring Financial Impacts of the Renewable Energy Based Fiscal Policy in Colombia under Electricity Price Uncertainty

Methodology for Sizing Hybrid Battery-Backed Power Generation Systems in Off-Grid Areas

Large-scale solar PV LCOE comprehensive breakdown methodology

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