Energy in Colombia Potential Addressable Market¶

Addressable Market Calculation¶

1. Smart Energy Services for Residential & SMEs¶

Key Assumptions & Rationale:
- Target Market Size: The total number of households and Small and Medium Enterprises (SMEs) in Colombia represents the potential customer base. Households are the primary residential segment, and SMEs (including micro, small, and medium enterprises, also referred to as Mipymes) represent the business segment likely to benefit from and adopt smart energy services for better cost management and efficiency.
- Adoption Rate: This represents the percentage of the target market that is expected to adopt smart energy services within a defined timeframe (e.g., the next 3-5 years). This rate is influenced by factors like customer awareness, perceived value (savings, convenience), ease of adoption, and enabling regulatory frameworks. We estimate a range based on the novelty of integrated smart services and the strong underlying demand signals related to high costs and desire for transparency and control.
- Average Annual Value per Customer: This is the estimated annual revenue generated per adopting customer for the smart energy services. This value could stem from subscription fees, a share of energy savings achieved, or fees for specific services like detailed analytics or personalized recommendations. Quantifying this precisely is challenging without specific service models defined, so we use a broad range based on potential value delivery.
Formula: Addressable Market (Annual Revenue) = (Number of Households + Number of SMEs) * Adoption Rate * Average Annual Value per Customer
Researched Numbers & Rationale:
- Number of Households: 18.5 million (2024). [3]
- Number of SMEs (Mipymes): Approximately 1.5 million formal active companies (ranging from 1.43 million to 1.56 million in 2024), which largely comprise Mipymes (99.4%). [12], [13] We use 1.5 million as a rounded estimate for the SME base addressable by broad smart energy services.
- Adoption Rate: Estimated range of 10% to 25% based on market signals and potential uptake over a few years.
- Average Annual Value per Customer: Estimated range of COP 200,000 to COP 600,000 per year, reflecting potential value capture through various service models.
Calculated Potential Addressable Market (Annual Revenue):
- Total Potential Customers: 18,500,000 + 1,500,000 = 20,000,000
- Lower bound: 20,000,000 * 10% * COP 200,000 = COP 400,000,000,000 (COP 0.4 trillion)
- Upper bound: 20,000,000 * 25% * COP 600,000 = COP 3,000,000,000,000 (COP 3 trillion)
Potential Addressable Market Range (Annual Revenue): COP 0.4 trillion to COP 3 trillion per year.

2. Integrated Loss Reduction Solutions for Utilities¶

Key Assumptions & Rationale:
- Target Market Size: The primary customers are electricity distribution companies, particularly those operating in regions with high technical and non-technical losses. Their revenue is a proxy for the scale of their operations and thus the potential market size for solutions that improve their financial and operational performance by reducing losses.
- Estimated Percentage of Revenue Allocated to Loss Reduction Solutions/Services: This represents the estimated portion of a distribution company's revenue in high-loss areas that is likely to be allocated to investing in and procuring external technologies, services, and consulting specifically aimed at reducing losses. This is a critical area for investment due to its impact on profitability and service quality.
Formula: Addressable Market (Annual Revenue to Solution Providers) = Revenue of Target Distribution Companies * Estimated Percentage of Revenue Allocated to Loss Reduction Solutions/Services
Researched Numbers & Rationale:
- Revenue of Target Distribution Companies (High-Loss Areas): Air-e and Afinia, operating on the Caribbean coast, are highlighted as facing significant loss issues. Their combined revenue in 2023 was COP 6.1 trillion (Air-e) [LaNota.com, 2024] + COP 5.9 trillion (Afinia, EPM subsidiary) [LaNota.com, 2024] = COP 12 trillion. We estimate a range of COP 12 trillion to COP 15 trillion for the annual revenue of distribution companies in high-loss regions, accounting for potential growth or other impacted areas.
- Estimated Percentage of Revenue Allocated to Loss Reduction Solutions/Services: Estimated range of 2% to 5%. This range reflects the significant, but still partial, allocation of utility budgets towards external solutions beyond internal operational efforts to combat losses. This is a broad estimation due to lack of specific utility CAPEX/OPEX breakdowns in the provided data.
Calculated Potential Addressable Market (Annual Revenue to Solution Providers):
- Lower bound: COP 12,000,000,000,000 * 2% = COP 240,000,000,000 (COP 0.24 trillion)
- Upper bound: COP 15,000,000,000,000 * 5% = COP 750,000,000,000 (COP 0.75 trillion)
Potential Addressable Market Range (Annual Revenue to Solution Providers): COP 0.24 trillion to COP 0.75 trillion per year.

3. Residential & SME Solar-as-a-Service (EaaS) with Innovative Financing¶

Key Assumptions & Rationale:
- Target Market Size: The total number of households and SMEs represents the potential customer base for rooftop solar PV systems.
- Suitability Rate (Technical Potential): Not all buildings have suitable roof space, orientation, or structural integrity for solar panels. This percentage estimates the portion of the target market's buildings that are technically viable for rooftop solar installation.
- Adoption Rate (Commercial Potential): This represents the percentage of technically suitable customers who are likely to adopt a Solar-as-a-Service (EaaS) model, where innovative financing removes the barrier of high upfront cost. This depends on the attractiveness of the EaaS offering (e.g., immediate savings vs. current electricity bill), ease of contract, and market awareness.
- Average System Size: The typical installed capacity of a rooftop solar system varies significantly between residential and SME customers. We use average sizes for each segment to estimate total potential capacity.
- Cost per Watt: This is the estimated installed cost per Watt of solar PV capacity for residential and SME systems. This cost forms the basis of the total potential capital expenditure market.
Formula: Addressable Market (CAPEX over timeframe) = (Number of Households * Residential Suitability Rate * Residential Adoption Rate * Avg Residential System Size * Cost per Watt) + (Number of SMEs * SME Suitability Rate * SME Adoption Rate * Avg SME System Size * Cost per Watt)
Researched Numbers & Rationale:
- Number of Households: 18.5 million (2024). [3]
- Number of SMEs (Mipymes): Approximately 1.5 million (2024). [12], [13]
- Suitability Rate (Technical Potential): Estimated range of 20% to 40%, a broad estimate for technical viability of rooftops.
- Adoption Rate (Commercial Potential): Estimated range of 5% to 15% of the suitable market, reflecting potential uptake of a new financing model over a few years.
- Average System Size: Residential ~3 kW, SME ~20 kW. These are typical size ranges observed in distributed solar markets.
- Cost per Watt: Using a proxy from an older UPME report updated with a recent COP/USD rate (~3900): Residential ~17,500 COP/W (mid-point of 15,600-19,500 COP/W range), SME ~13,500 COP/W (mid-point of 11,700-15,600 COP/W range). [25]
Calculated Potential Addressable Market (CAPEX over a few years):
- Lower bound (Suitability 20%, Adoption 5%):
  - Residential: 18,500,000 * 0.20 * 0.05 * 3,000 W * 17,500 COP/W = COP 971,250,000,000 (COP 0.97 trillion)
  - SME: 1,500,000 * 0.20 * 0.05 * 20,000 W * 13,500 COP/W = COP 405,000,000,000 (COP 0.41 trillion)
  - Total Lower Bound CAPEX: COP 0.97 trillion + COP 0.41 trillion = COP 1.38 trillion.
- Upper bound (Suitability 40%, Adoption 15%):
  - Residential: 18,500,000 * 0.40 * 0.15 * 3,000 W * 17,500 COP/W = COP 5,812,500,000,000 (COP 5.81 trillion)
  - SME: 1,500,000 * 0.40 * 0.15 * 20,000 W * 13,500 COP/W = COP 2,430,000,000,000 (COP 2.43 trillion)
  - Total Upper Bound CAPEX: COP 5.81 trillion + COP 2.43 trillion = COP 8.24 trillion.
Potential Addressable Market Range (CAPEX over a few years): COP 1.4 trillion to COP 8.2 trillion. This represents the potential cumulative capital expenditure market for residential and SME rooftop solar installations enabled by innovative financing models over the next few years.

4. Bespoke Green Power Purchase Agreements (PPAs) for Commercial & Industrial (C&I) Clients¶

Key Assumptions & Rationale:
- Target Market Consumption: The total annual electricity consumption by Commercial and Industrial (C&I) clients in the non-regulated market. These clients have the ability to negotiate electricity supply contracts directly.
- Estimated Non-Regulated Share of Consumption: The percentage of total national electricity consumption accounted for by the non-regulated market.
- Estimated PPA Coverage Rate: The percentage of the non-regulated market's energy consumption that is expected to be covered by new bespoke green PPAs. This rate is driven by C&I client demand for price certainty, green credentials, and tailored energy solutions.
- Average PPA Price per kWh: The estimated average price per kilowatt-hour that C&I clients would pay under these green PPAs. This price is a key determinant of the market value.
Formula: Addressable Market (Annual Contract Value) = Total National Electricity Consumption * Estimated Non-Regulated Share of Consumption * Estimated PPA Coverage Rate * Average PPA Price per kWh
Researched Numbers & Rationale:
- Total National Electricity Consumption: 82.0849 TWh (82,084,900,000 kWh) in 2024. [39]
- Estimated Non-Regulated Share of Consumption: Estimated range of 30% to 40% of total national consumption. This is a general estimate of the proportion of energy consumed by large users.
- Estimated PPA Coverage Rate: Estimated range of 30% to 60% of the non-regulated market's consumption. This reflects the growing trend of C&I clients seeking direct renewable energy sourcing through PPAs.
- Average PPA Price per kWh: Estimated range of 250 COP/kWh to 300 COP/kWh, reflecting competitive pricing for renewable energy supply contracts in the non-regulated market, informed by typical non-regulated prices around this range in 2024/2025. [9], [35]
Calculated Potential Addressable Market (Annual Contract Value):
- Lower bound: 82,084,900,000 kWh * 30% * 30% * 250 COP/kWh = 82,084,900,000 * 0.30 * 0.30 * 250 = COP 1,846,910,250,000 (COP 1.85 trillion)
- Upper bound: 82,084,900,000 kWh * 40% * 60% * 300 COP/kWh = 82,084,900,000 * 0.40 * 0.60 * 300 = COP 5,910,112,800,000 (COP 5.91 trillion)
Potential Addressable Market Range (Annual Contract Value): COP 1.85 trillion to COP 5.91 trillion per year.

5. Community-Centric Renewable Energy Project Development¶

Key Assumptions & Rationale:
- Pipeline Capacity: The total planned renewable energy generation capacity (in MW) located in areas facing significant social and environmental challenges, where community-centric development approaches are essential for project realization. This pipeline is identified from industry reports on projects facing delays or opposition.
- Average Project CAPEX per MW: The estimated average capital expenditure required to build one MW of renewable energy capacity (solar or wind) in Colombia. This provides the total value of the project pipeline.
- Percentage Allocation to Community-Centric Development: This is the estimated portion of the total project CAPEX (or overall project value/cost) that is attributed to implementing enhanced community engagement strategies, benefit-sharing mechanisms, and specialized services related to gaining and maintaining social license to operate.
Formula: Addressable Market (CAPEX for Community Aspects over timeframe) = Pipeline Capacity (MW) * Average Project CAPEX per MW * Percentage Allocation to Community-Centric Development
Researched Numbers & Rationale:
- Pipeline Capacity: SER Colombia reports a pipeline of renewable projects facing challenges, including those initially planned for 2023-2024 (3.33 GW) and significant capacity in La Guajira (initially 1.25 GW) that faced delays. [16], [17] We estimate the relevant pipeline for community-centric approaches to be in the range of 2 GW to 5 GW over the next few years, representing projects where these approaches are critical for moving forward.
- Average Project CAPEX per MW: Using estimated utility-scale solar/wind costs updated with a recent COP/USD rate (~3900): Estimated range of COP 9.75 billion/MW to COP 13.65 billion/MW. [25] We use the range endpoints for calculation.
- Percentage Allocation to Community-Centric Development: Estimated range of 3% to 8%. This reflects the potential cost or value associated with dedicated resources, programs, and agreements for community engagement and benefit sharing as part of project development in sensitive areas. This is a broad estimation.
Calculated Potential Addressable Market (CAPEX for Community Aspects over a few years):
- Lower bound: 2,000 MW * 9.75 COP billion/MW * 3% = 2,000 * 9.75 * 0.03 = COP 585,000,000,000 (COP 0.59 trillion)
- Upper bound: 5,000 MW * 13.65 COP billion/MW * 8% = 5,000 * 13.65 * 0.08 = COP 5,460,000,000,000 (COP 5.46 trillion)
Potential Addressable Market Range (CAPEX for Community Aspects over a few years): COP 0.59 trillion to COP 5.46 trillion. This represents the potential market value associated with integrating community-centric strategies and initiatives into the development of renewable energy projects facing social and environmental challenges.

6. Energy Efficiency as a Service (EEaS) for SMEs¶

Key Assumptions & Rationale:
- Target Market Size: The total number of SMEs (Mipymes) in Colombia.
- Average Annual Energy Consumption per SME: The estimated average annual electricity and/or gas consumption per SME. This is challenging to determine directly for all SMEs. Instead, we estimate the total energy consumption of the SME sector as a portion of national consumption.
- Potential Energy Savings Percentage: The estimated average percentage of energy consumption that can be saved by SMEs through the implementation of energy efficiency measures facilitated by EEaaS. This is based on industry potential estimates.
- Average Energy Price for SMEs: The average price SMEs pay for electricity and/or gas. This is used to value the energy savings.
- ESCO Revenue Share of Savings: The percentage of the value of the achieved energy savings that is retained by the Energy Service Company (ESCO) providing the EEaaS.
Formula: Addressable Market (Annual Revenue to ESCOs) = Total SME Energy Consumption * Potential Energy Savings Percentage * Average Energy Price * ESCO Revenue Share of Savings
- Total SME Energy Consumption = Total National Electricity Consumption * Estimated SME Share of Consumption
Researched Numbers & Rationale:
- Number of SMEs (Mipymes): Approximately 1.5 million (2024). [12], [13]
- Total National Electricity Consumption: 82.0849 TWh (82,084,900,000 kWh) in 2024. [39]
- Estimated SME Share of Consumption: Estimated range of 20% to 30% of total national electricity consumption, reflecting the significant economic activity of SMEs.
- Potential Energy Savings Percentage: Estimated range of 10% to 25%, based on reports indicating significant efficiency potential in the industrial/commercial sectors. [4], [6], [18]
- Average Energy Price for SMEs: Estimated range of 280 COP/kWh to 320 COP/kWh, representing a blended rate for electricity considering regulated and non-regulated tariffs applicable to different SME sizes. We use 300 COP/kWh as a midpoint. For gas, industrial/commercial prices were around 741-1014 COP/m3 in 2024. Energy consumption can be a mix of electricity and gas. Let's focus on electricity consumption value for simplicity, as electricity data is more readily available in the provided text.
- ESCO Revenue Share of Savings: Estimated range of 40% to 60%, a typical range in performance-based energy efficiency contracts.
Calculated Potential Addressable Market (Annual Revenue to ESCOs):
- Estimated Total SME Electricity Consumption:
  - Lower bound: 82,084,900,000 kWh * 20% = 16,416,980,000 kWh
  - Upper bound: 82,084,900,000 kWh * 30% = 24,625,470,000 kWh
- Lower bound (Savings 10%, Share 40%): 16,416,980,000 kWh * 10% * 300 COP/kWh * 40% = COP 196,903,760,000 (COP 0.2 trillion)
- Upper bound (Savings 25%, Share 60%): 24,625,470,000 kWh * 25% * 300 COP/kWh * 60% = COP 1,108,146,150,000 (COP 1.11 trillion)
Potential Addressable Market Range (Annual Revenue to ESCOs): COP 0.2 trillion to COP 1.11 trillion per year.

7. E-Mobility Infrastructure & Fleet Solutions¶

Key Assumptions & Rationale:
- Projected Number of EVs: The expected number of electric vehicles (passenger cars, commercial vehicles, motorcycles, etc.) in Colombia by a specific future year (e.g., 2030). This drives the need for charging infrastructure and related services.
- Percentage Requiring New Public/Fleet Charging: The portion of the EV fleet that will rely on or require access to public charging infrastructure and/or dedicated fleet charging solutions, beyond basic home or depot charging.
- Average New Charging Points Needed per Requiring EV: An estimate of how many new charging points (public or fleet) are needed per EV that requires this type of infrastructure, over the timeframe.
- Average Cost per Charging Point: The estimated capital expenditure for deploying a single charging point, averaged across different charger types (fast, slow) relevant for public and fleet use cases.
Formula (CAPEX for Public/Fleet Charging Infrastructure over timeframe): Addressable Market (CAPEX over timeframe) = Projected Number of EVs * Percentage requiring new Public/Fleet Charging * Average New Charging Points needed per requiring EV * Average Cost per Charging Point
Researched Numbers & Rationale:
- Projected Number of EVs: Government target is 600,000 EVs by 2030, considered ambitious. [2], [3] A more conservative estimate suggests EVs might not exceed 3% of the total fleet by 2032 (total fleet size not provided). [2] We use a range for potential EV adoption by around 2030: 250,000 to 600,000 EVs.
- Percentage requiring new Public/Fleet Charging: Estimated range of 20% to 40% of the projected EV fleet, acknowledging the importance of home charging but recognizing the need for public/corridor charging and dedicated fleet infrastructure.
- Average New Charging Points needed per requiring EV: Estimated range of 0.1 to 0.2, reflecting that not every EV will need a dedicated new public/fleet charger and accounting for utilization.
- Average Cost per Charging Point: Estimated range of COP 20 million to COP 80 million, reflecting the diverse types and costs of public/fleet charging equipment.
Calculated Potential Addressable Market (CAPEX for Public/Fleet Charging Infrastructure over next ~5 years):
- Lower bound: 250,000 EVs * 20% * 0.1 * COP 20,000,000 = COP 100,000,000,000 (COP 0.1 trillion)
- Upper bound: 600,000 EVs * 40% * 0.2 * COP 80,000,000 = COP 3,840,000,000,000 (COP 3.84 trillion)
Potential Addressable Market Range (CAPEX for Public/Fleet Charging Infrastructure over next ~5 years): COP 0.1 trillion to COP 3.84 trillion.
Key Assumptions & Rationale (Fleet Solutions - Annual Revenue):
- Projected Number of EVs: Same as above.
- Percentage in Commercial Fleets: The portion of the total EV fleet that belongs to commercial operators or businesses running fleets. These are prime candidates for specialized fleet management and charging solutions.
- Average Annual Value per Fleet EV: The estimated annual revenue generated per commercial fleet EV from specialized E-mobility solutions (e.g., charging management software, telematics, maintenance packages).
Formula (Annual Revenue for Fleet Solutions): Addressable Market (Annual Revenue) = Projected Number of EVs * Percentage in Commercial Fleets * Average Annual Value per Fleet EV
Researched Numbers & Rationale:
- Projected Number of EVs: 250,000 to 600,000 EVs by around 2030.
- Percentage in Commercial Fleets: Estimated range of 10% to 20% of the total EV fleet.
- Average Annual Value per Fleet EV: Estimated range of COP 1,000,000 to COP 3,000,000 per year, reflecting the value of bundled services beyond just electricity supply.
Calculated Potential Addressable Market (Annual Revenue for Fleet Solutions):
- Lower bound: 250,000 EVs * 10% * COP 1,000,000 = COP 25,000,000,000 (COP 25 billion)
- Upper bound: 600,000 EVs * 20% * COP 3,000,000 = COP 360,000,000,000 (COP 0.36 trillion)
Potential Addressable Market Range (Annual Revenue for Fleet Solutions): COP 25 billion to COP 0.36 trillion per year.

8. Modular/Decentralized Gas Monetization Solutions¶

Reiteration due to Data Availability: Based on the provided knowledge and performed searches, specific, quantifiable data on the volume of stranded or flared gas in Colombia and the typical costs or revenue streams associated with deploying modular gas monetization solutions in the Colombian context is not available. While the market opportunity exists conceptually, driven by the need for domestic gas supply and environmental considerations regarding flaring, it is not possible to perform a robust, data-driven market size calculation in COP based on the information at hand. Therefore, we cannot provide a quantified addressable market range for this whitespace with the available data.

References¶

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