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An Appraisal of the Challenges and


Opportunities for the Colombia Inteligente
Program Implementation
R. Céspedes, Senior Member, IEEE, R. A. León, Senior Member, IEEE, H. Salazar, Member, IEEE,
M. E. Ruiz, Member, IEEE, R. Hidalgo, Member, IEEE, and D. Mejia, Student Member, IEEE

that a careful examination of the real drivers for smart grid


Abstract-- The Colombia Inteligente (Smart Colombia) introduction in a developing country like Colombia need to be
Initiative is a non-governmental program whose objective is to evaluated.
establish different strategies for a successful implementation of Colombia Inteligente (Smart Colombia) is private initiative
smart grid technology in a Colombia. The program started in
to support and coordinate the penetration of smart grid
November 2009 and has developed a conceptual basis for the next
years to come. A critical factor in the success of the Colombia technology to the country. The initiative has made progress in
Inteligente Program is to identify the drivers for smart grid identifying potential application of the technology provided by
implementation based on the country needs and expectations. smart grids on the lights of country’s need. In order to
Environmental concerns, increasing electricity consumption, contribute to the Colombia Inteligente initiative, this paper
security of energy supply, aging infrastructure and significant analyses what drivers might provide a business incentive for
advances in communication and information technologies have
smart grid in Colombia. This paper is organized as follows.
been identified as major drivers for smart grid deployments
worldwide. Some of these drivers might not be the focal aspects Section II describes the Colombia Inteligente (Smart
for smart grid in developing countries. This paper introduces Colombia) initiative. It provides details of how the program
how the Smart Colombia Initiative is conceptualized and has been conceived and conceptualized. Since natural
analyses different drivers that provide opportunities for its resources and market design provide opportunities and barriers
implementation. for smart grid penetration, section III describes the Colombian
electric system and the main characteristics of the electricity
Index Terms-- Smart Grid Technology, Colombia Inteligente
(Smart Colombia), Smart Grid Drivers
market. Section IV provides some thoughts about the drivers
that can provide opportunities for Colombia Inteligente
I. INTRODUCTION implementation. Finally, conclusions are in section V.

T he common assumption worldwide is that the


development of smart grid (SG) technology follows the
need for solving environmental concerns, increasing electricity
II. THE COLOMBIA INTELIGENTE INITIATIVE
Colombia Inteligente, or Smart Colombia, is an initiative to
consumption, security of energy supply and aging support and coordinate the efforts to solve specific SG related
infrastructure. Those issues, coupled with the significant challenges by introducing new technologies and solutions for
advances in communication and information technologies, a countrywide implementation of smart grid projects. The
establish a distinctive framework for a successful introduction initiative also aims to accompany the technological evolution
of the smart grid concept to mainstream utilization in USA of the electric industry in Colombia and other strategic sectors
and Europe [1]. However, some of these drivers might not be that are relevant to the country, i.e., transportation and
the drivers for a successful implementation of smart grids in construction. Fig. 1 shows a conceptual framework for
developing countries. Access to energy sources and gross Colombia Inteligente showing the involved sectors and
domestic product per capita are examples of areas with subsectors and the involved SG elements that are identified for
substantial differences, which indicate the need to carefully each one.
examine the real drivers for smart grid introduction in a As mentioned, the objective of the initiative is to support
developing country like Colombia. These differences indicate and coordinate different efforts to promote smart grid
implementation. Information sharing, guidance to project
development and close cooperation have been identifies as
R. Céspedes is with RConsulting Group, Bogotá, Colombia (e-mail: fundamental aspects for successful implementation. As for
renato.cespedes@rcgsas.com).
R. A. León and M. E. Ruiz are with XM S.A. E.S.P, Medellín, Colombia information sharing, the initiative has created a web page
(e-mail: {raleon}{meruiz}@xm.com.co). (http://www.colombiainteligente.com.co) and is developing a
H. Salazar is with Universidad Tecnológica de Pereira, Pereira, Colombia virtual community based on social media tools. On the other
(e-mail: hsi@utp.edu.co)
R. Hidalgo is with Empresas Públicas de Medellín – EPM, Medellín,
hand, as for guidance to project development, the initiative is
Colombia (e-mail: Rodrigo.Hidalgo@epm.com.co) working for designing a collective road map, evaluation
D. Mejia is with Iowa State University and with Universidad de Antioquia metrics and development strategies for smart grid projects. It
(e-mail: diegomej@iastate.edu)

978-1-4673-2729-9/12/$31.00 ©2012 IEEE


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is also working in conjunction with ICONTEC (The


Colombian National Standards Body) and with NIST in order
to provide standards for adequate interoperability in line with
the international efforts. In the same line, the initiative is
working to propose a policy framework for smart grid
implementation in the country. Finally, as for close
cooperation, Colombia Inteligente has brought together
universities and companies in the key sectors with two main
objectives: 1) To build a comprehensive list of smart grid
projects that are being developed in the country, and 2) to
promote new projects with the participation of utilities,
industry and universities. It is expected that close cooperation
can improve the probabilities of success of the projects and
minimize the pilot project costs.
Fig. 2. Colombia Inteligente proposed actions

Fig. 1. The Colombia Inteligente conceptual framework


Fig. 3. Survey results

Fig. 2 shows the main fields of action (blue ring) that


Colombia Inteligente has proposed to dedicate concrete efforts III. THE COLOMBIAN ELECTRIC ENERGY SYSTEM AND ITS
for smart grid implementation in the electric sector. They have ELECTRIC ENERGY MARKET
been established to achieve higher levels of efficiency and
Colombia has a hydro-dominated electricity market.
sustainability of the national electrical system and ensuring a
Roughly speaking, 70% of its energy and 64% (8,525 MW) of
reliable and secure operation of the system (purple ring). The
its capacity come from hydro resources, with the remainder
green ring represents all resources that are needed to achieve
supplied by thermal generation plants. Thermal generation is
the goals.
mostly gas-based generation (4,089 MW) and located near gas
Fig. 3 shows the main results of a survey that are
reservoirs in the Northwestern region.
synthetized in Fig. 2 that was conducted with the input of
The Colombian wholesale electricity market, MEM for its
different actors.
Spanish name, came about after the enactment of the 142 and
It is worth mentioning that the promoters of this initiative
143 laws of 1994 (Public Utilities Law and Electricity Law,
are XM (The Colombian Power System operator and market
respectively). The laws wanted to introduce more competition
administrator), CIDET (Electrical Sector Research Center), among agents and create solid institutions that would take
COCIER (Colombian branch of CIER), CNO (National charge of all the aspects of the sector.
Operation Council), CAC (Commercialization Advisor The current wholesale power market consists mainly of
Committee) and CINTEL (Communications Research Center). three components:
These promoters have held various meetings and workshops 1. A daily real time market: It is a spot energy market with a
and they realize the necessity to work together to maximize single-zone hourly price. That is, there is one energy price
the benefits of the new technology. It is expected that the for the whole system that is calculated in an hourly basis.
initiative provides a solid foundation for the smart grid The price is determined based on the intersection between
development in the country. aggregated generation bids and demand and ignoring all
transmission constraints (infinite grid capacity).
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2. A bilateral contract market: It is a market in which and sub-transmission networks. However, in such
generators and electricity suppliers sell and purchase projects, especial considerations must be made about
energy at freely negotiated prices and quantities. This reliability and service continuity of the distributed
market is fundamentally financial. generators.
3. A firm energy market: A market designs to ensure that 3. Service coverage: Due to areas with low population
there will be sufficient energy resources, particularly in density, long distances from the central interconnected
exceptionally dry periods. transmission system, and rough topography, at present in
Colombia, there is a significant portion of inhabitants
As mentioned, the market is highly dependent of hydro with poor or without electricity service at all. SG
resources with plenty of hydro potential to be built. That is, it technologies can group different types of distributed
estimates that the capacity of the system can be at least energy sources (DERs) to create isolated microgrids,
duplicated only with hydroelectricity. The country also has providing these communities with a fairly cheap solution
reserves of natural gas and coal. From this perspective, and more reliable service.
environmental concerns might not be a potential driver for 4. Electricity costs: DG and cogeneration systems with
smart grid development in Colombia. advanced controllers can help industries, commercial
buildings, and small communities to reduce energy
consumption from the main grid while reducing costs at
peak hours, shortages due to faults, network
IV. DRIVERS FOR THE IMPLEMENTATION OF SMART GRID
maintenances, and even delivering electricity back to the
TECHNOLOGY IN COLOMBIA
networks (electricity sales).
The followings subsections describe some drivers for smart Unfortunately, as it happens in most of the developing
grid implementation based on the country needs. These drivers countries, Colombia currently does not count with a proper
can be considered as opportunities for the Colombia regulation that enables DG and SG deployment. Although the
Inteligente program implementation. Colombian electricity market facilitates the connection of
small generators to the main interconnected power system,
A. Opportunities in Generation most network (system) operators are not interested in such
integration. The lack of understanding of benefits brought by
As it has been stated before, a better understanding of
the implementation of SG combined with generation projects,
technical and economic impacts of smart grid (SG)
and the few technical standards available for SG and DG
technologies is fundamental in order to implement such
applications, are strong barriers preventing their integration,
projects in developing countries like Colombia. Most of the
even worldwide.
drivers that are considered worldwide for the deployment of
Research and development initiatives, such as the Colombia
SG projects include some form of distributed generation (DG),
Inteligente program, are fundamental as an initial step in order
especially renewable energy sources (RESs). Therefore,
to join efforts from utilities, universities and technology
generation projects that incorporates smart grids technologies
providers, around suitable solutions for Colombia needs and
(and vice versa) should be carefully analyzed under each
generation business opportunities.
country needs.
Since central power plants and transmission networks have
already controllers and communication devices in place, B. Opportunities in Transmission
except perhaps advanced protection schemes and wide area The Orders issued by the National Electricity and Gas
monitoring and control, smart grid implementation brings Regulatory Commission of Colombia (CREG) regarding the
most opportunities at the DG level [2]. Furthermore, large- transmission business, offer economic incentives for
scale integration of DG into transmission networks can be transmission companies to maintain strict levels of asset
considered now through SG technologies and concepts. availability and power quality. Therefore, even though Smart
Benefits from planned DG connections at distribution and Grid technologies are not mentioned explicitly on those
transmission networks have been widely discussed [3-5]. In orders, it is evident that those companies will try to introduce
addition, some SG technologies provide dispatch and control smart grid technologies for complying with CREG’s
capabilities that enhance such benefits [6-7]. requirements. Some of the efforts taking place in Colombia
The following are examples of generation business relate to automatic voltage control, automated event analysis,
opportunities that will are provided by SG technologies and real time asset monitoring and Asset Management projects.
might be considered drivers in Colombia: Other implications of the orders regarding transmission
1. Power quality and reliability (PQ&R): DG has been used business in Colombia are the penalties imposed for non-
since long time to assure PQ&R in industry and supplied energy due to contingencies in the high voltage grid.
commercial buildings, in the form of backup generators. In this sense, transmission companies are induced to engage in
SG technologies enable the same function at different efforts to develop self-healing strategies for minimize and
points in distribution networks. mitigate the impact of the events in the system.
2. Technical losses: DG output controlled by SG
technologies can be used for voltage-VAR control in C. Opportunities in Distribution
order to reduce technical losses in long rural distribution Non-technical loss (NTL) reduction or control of non-
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technical losses has been identified as one of the most if utilities take advantage of the opportunities provided by the
important drivers for developing smart grid in developing Order.
countries [8]. In Colombia and roughly speaking, the total
percentage of NTL is 20% that is considered high to
D. Opportunities in Power System Supervision and Control
international standards. NTL are caused by theft, error in
meter reading, defective meters or a flawed billing system. The Colombian high voltage transmission grid is supervised
The National Electricity and Gas Regulatory Commission today by traditional SCADA/EMS systems. This is the
of Colombia (CREG) issued on December 2011 Order No. standard for the industry around the world, and the
172-2011 regarding optimal incentive to reduce NTL in opportunities for smart grid introduction in this field are the
Colombia [9]. The Commission determined that the Final Rule same regardless the level of development of any country.
would improve the operation of distribution systems as it Today, the supervision architecture relies on a proven design
expected a significant reduction of NTL. that dates back to the 1970’s where the most expensive item
The Order basically defined a mechanism to calculate a was the central computer and when communications were not
tariff increment to finance a loss reduction plan over five years highly reliable. Today, the advanced technology for system
[10]. According to the Order, a loss reduction plan is as a set monitoring and control being used still relies on the same
of actions performed by utilities in order to reduce NTL. The basic architecture of star communications and centralized
plan also needs to stipulate the loss level targets (total computing.
percentage of NTL) that will be achieved every six months by Since the appearance of the new monitoring technology of
the actions specified in plan. The actions might include phasor measurement units (PMU) [12], there has been a boom
replacement of old or defective meters by smart meters, theft in research and development on how to integrate these
detection, upgrade or improved the business process advancements to the current framework for supervision and
associated with NTL, etc. It is important to mention that the control.
plan (actions and loss level targets) is presented by the utility The new information technologies emerging now, promise
to the Commission to be approved. Once accepted, the plan is to change the current paradigm on supervision and control in
put into operation and financed by the tariff increment. The the electric energy business. Today’s technologies allow for a
increment is calculated based on optimization model that takes leap in the capability and quality of the monitoring equipment
into account successful experience of different utilities that in the substations and linear infrastructure. Modern
have reduce NTL significantly in Colombia [11]. The communication architectures (like cloud computing) provide a
increment guarantees that end users pay a fair tariff to achieve reliable medium for exchanging monitoring information to,
a significant loss reduction. from and between substations and the control center.
According to the Order, utilities are not obligate to present Additionally, new methods for analysis and control of power
the plan and therefore request a tariff increment. In such case, systems could enable the promise for self-healing capabilities
all the cost of NTL reduction is borne by the utilities and in electric power systems, which could prevent and/or mitigate
cannot be translated to end-user via electricity tariff. This the impacts of large scale events, like the US Blackout of 2003
might be the case of utilities that have already low values of and the Colombian Blackout of 2007 [13].
losses. On the other hand, if a utility presents a plan and it is The ever-evolving regulation of the Colombian power
approved, it is obligated to fulfill the loss level targets system has been pushing for more reliability and control. At
specified in the plan. This is likely to be the case for most of the same time, customers require cheaper costs for the electric
the utilities in the country as it is difficult to reduce NTL energy service. Additionally, Colombia is still subject to
without additional financial resources that can be accessed via terrorist attacks on the energy infrastructure which sometimes
tariff increment. The Order clearly establishes financial take the system to alert states, reducing the margin for errors
penalties if targets are not fulfilled. It is expected that the tariff for the operators at the control room. Therefore, there is a
increment and the financial penalties stipulates in the Order constant need for improving the monitoring and control of the
provides enough incentives for utilities to reduce NTL in the system, and the new technologies associated with smart grid
next five years. fit perfectly for helping achieve this goal.
Although the Order was not designed as a smart grid driver
in Colombia, it provides the necessary regulatory and financial E. Opportunities in Power System Planning
incentives for a successful implementation of smart grid in the All of the new developments, trends, and challenges in the
country. That is, the loss reduction plan does not limit utilities Colombian smart grid era, not only require of efficient use of
to traditional loss reduction actions. Instead, it allows different technologies and adequate standards and regulation; but also, a
initiatives whose goals are exclusively to reduce NTL. This carefully designed long term plan that facilitates the
opens the possibility to incorporate all the new technology that implementation of smart grid initiatives.
is provided by the smart grids. Specifically, smart meters, new Such a plan is responsible for providing directions of what a
communication technology or ambitious demand-side smart energy sector will look like in fifteen or twenty years
management programs might be considered actions that are from now. The guiding long-term directions, expansion of
part of the loss reduction plan. Hence, Colombia might be on both the transmission grid and the generation system,
the verge of being a successful case of smart grid deployment determine the quality and degree of feasibility of smart grid
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implementations in the country. Important objectives like works for spreading all types of risk, but also creates demand
reliability, security, resilience, and sustainability of the for R+D related to penetration of current and environmentally
Colombian smart grid depend also on the effectiveness and friendly technologies for electricity generation. All these
accurate control of the possible future scenarios related to the situations that are part of planning will lead to a more reliable,
local conditions. To do so, general concepts related to more economical, and smarter power system operation.
flexibility and robustness are key elements for addressing Developing countries like Colombia should these new
those uncertainties. transformation processes as a platform for creating
From the operation point of view, a system is flexible when opportunities that will end up in the improvement of
the capacity of the system can respond quickly to changes in macroeconomic indicators. We think adding these kinds of
demand; and from the long term planning point of view, a long-term analysis in initiatives like Smart Colombia are part
flexible plan is one that can be adapted in a timely and cost- of what a comprehensive smart grid is about.
efficient way to the requirements of future scenarios [14].
On the other hand, robustness relates to the ability of the
F. Comments on Regulatory Issues
system to handle all of the requirements of the scenarios.
Thus, an effective plan is a tradeoff between flexibility and As mentioned in sections IV.B and IV.C, the National
robustness. A very flexible plan might not be robust, but it is Electricity and Gas Regulatory Commission of Colombia
cheaper than a robust strategy. (CREG) is a national body in charge of all regulatory aspects
Developing countries like Colombia offer opportunities as of the electric sector. The commission has issued several
well as risks. To identify risks, it is important to detect the Orders that aim to promote an efficient operation and planning
scenario drivers (uncertainties) and the potential undesired of the electric system. Up to date, there is not a specific order
impacts on the system, which are reflected in the society (load related to smart grid in the country. However, it can be
curtailments). Long term power planning involves studying mentioned that the sprit of several Orders such as Order 070-
uncertainties regarding economic indicators like price 1998, Order 082-2002, Order 097-2008, and recently Order
fluctuations and reserves of natural gas, coal, and oil; 172-2011 encourage different market participants (utilities,
economic growth and energy demand, market regulation, GENCOS, TRANSCO, etc) to implement efficient
variability in future meteorological conditions (hydrology) and technologies in their systems. As for the non-technical loss
other renewable resources used in electricity generation. In reduction, these orders open the possibility to incorporate the
addition, in the smart grid era, more uncertainty sources will new technology provides by smart grids.
be present in long term planning due to potential changes in
energy consumer behaviors (price-responsive demand),
market regulation, development of communication and V. CONCLUSIONS
information technologies. Not only all the mentioned This paper introduces the Colombia Inteligente initiative
examples of scenario drivers apply to the Colombian case; but and shows how it has been conceptualized in order to promote
also other conditions proper of the local reality such as the implementation of different technologies provided by
terrorist attacks to the infrastructure as well as weather events smart grids. The paper also emphasizes the importance of a
(el Nino and la Nina) etc. careful examination of potential drivers that might promote
In Colombian case, there are opportunities to build a power the penetration of smart grids in Colombia. Different drivers
system able to handle uncertainty through by means of have been analyzed. They are shown as opportunities in
robustness and flexibility. A well-known way to achieve generation, transmission and distribution. It has been observed
robustness is diversifying the energy portfolio. Currently, the that power system supervision, control, and planning also
Colombian power system is hydro-dominant, and according to provide interesting opportunities for smart grids penetration. A
the most updated expansion plan developed by UPME few comments on current regulatory issues are presented as
(Unidad de Planeacion Minero-Energetica) [15], it will keep well. Finally, it is expected that this kind of works enrich the
the same trend in the near future. Although it is true that debate about what kind of drivers can really motivate the
Colombia is relatively clean in terms of greenhouse gas penetration of SG in the country.
emissions, it is crucial to continue looking for more energy
production alternatives that are economically, socially, and VI. REFERENCES
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VII. BIOGRAPHIES

Renato Céspedes graduated as Electrical Engineer (1972) from the


University of the Andes (Colombia) and obtained a Doctor in Electrical
Engineering (1976) degree from the National Polytechnique Institute of
Grenoble, France. He is associate professor at the National University of
Colombia. Dr. Cespedes is presently partner and CEO of RCONSULTING
GROUP, a consulting company based in Bogotá with interest in automation,
technology and Smart Grid concepts. Dr. Cespedes retired in 2009 from
KEMA Inc. where he held the position of Director of the Latin America
operations.

Ramón León (M’08, SM’10). Ramon Leon earned his BSc degree in
Electrical Engineering from Universidad Tecnológica de Bolivar in 1997 and
his MSc degree in Electrical Engineering from Iowa State University in 2005.
He is the Research and Development Projects Coordinator at XM S.A., the
Colombian Independent Power System Operator, where he has been since
1997. Mr. León is a Fulbright–Colciencias Scholar and Senior Member of the
IEEE. He is currently a member of the Advisory Board for the National
Energy and Mining Research Program at Colciencias. His research interests
include Power System Planning, Power System Flexibility, Smart Grid,
Advanced Supervision and Control Systems, and WAMPAC systems.

Harold Salazar (M’09) received his BEE and M.S degrees in electrical
engineering from the Technological University of Pereira (UTP), Colombia,
in 1998 and 2003 respectively. He received the Ph.D. degree in electrical
engineering and the M.S. degree in economics from Iowa State University,
Ames in 2008. Currently, he is an associate professor at UTP. His research
interests include power system economics, transmission investment, and
energy policies.

María Elena Ruiz is an electrical engineer of the University of Antioquia.


She is with XM SA ESP, as an Energy Market Specialist. Currently,
coordinates Smart Grids and electricity market projects at XM.

Rodrigo Hidalgo (M’09) received his Ingeniero Electricista (Electrical


Engineer) degree from Universidad Pontificia Bolivariana, Medellín,

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