Tax break for Colombian utility's wind program

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Colombian utility Empresas Públicas de Medellin (EPM) has secured an $8.58 million tax exemption for its wind power program. The country's national science and technology council (Colciencias) classified $19.6 million of the $28 million program as a "technological innovation project," qualifying it for the tax break. EPM now has lower costs and financial risk in its program, while the government sees a pilot project that could benefit the whole country through employment, innovation and reduced fossil fuel consumption. Of the program's two main components, a wind farm of around 20 MW in the north east Alta Guajira area of the country is what catches the eye. EPM's Luis Carlos Rubiano says: "This is not a project, it's a program, and has much greater breadth than just a wind farm." Aided by Germany's overseas development agency GTZ, the program sets out to verify the potential of wind power in Columbia and increase the knowledge base for its introduction into the free market. Wind power is not economically viable under present market conditions, according to EPM head Ivan Correa. The power market is facing a glut of cheap hydro, which together with unfavourable regulations has reached the point where a number of low cost thermal generators have decided to dismantle and relocate to different countries. Wind is even more an unknown in Colombia than it is elsewhere, and the challenge to get it implemented is daunting. But the good winds EPM has been measuring in the Alta Guajira could make wind power a generation option in Colombia, says Correa. Detailed plans for the 20 MW project are expected in for June, Rubiano says. "They say 20 MW, so it could be anything between 15 and 25," he adds. EPM is financing the project 100%, although it has made contact with the World Bank on the issue of carbon credits, Rubiano says. If all goes to plan, construction on the wind farm could start by the end of the year.

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