EPM, climate change and hidroelectric power

In 2016 Colombia faced one of its worst energetic crisis in decades due to El Niño phenomenon. EPM as one of the main power generators in the country is at the front line of companies affected by climate change.

During March and April 2016 Colombia faced the most critical energetic crisis in more than two decades. Highly dependent on hydroelectric generation of power, Colombia was exposed to an extended El Niño phenomenon that left the most important dams in the country without enough water to supply the energetic needs of the country. In parallel, the crisis was aggravated for a court ruling to suspend the use of the El Quimbo dam[1], a fire in the Guatape[2] dam substation that affected 25% of the country’s energetic production, and the constraint on Venezuela to supply natural gas, the best available alternative to produce energy, in thermoelectric companies. In the midst of the crisis was the Empresa de Energia de Medellin (EPM, that translates to Medellin Energy Company), one of the main players in energetic production of the country and concessioner of the Guatape dam.


El Niño phenomenon is the warming phase of the “walker circulation”, that consists of swinging temperatures and changing air surface pressure in the Pacific Ocean, in the coasts of Colombia, Ecuador and Peru. During El Niño phase rain decreases and temperatures increase, generating draughts in the most intense years. In recent years, the recurrence of El Niño has increased in connection with climate change and global warming.[3] The effects have been evident in agriculture, wildlife and water supply.

EPM is one of the largest companies in Colombia, growing from a hydroelectric operation to span several other activities like water, waste management, natural gas, and communications. Owned by the Medellin Municipality, EPM is one of the largest contributors of income for the city, and the concessioner of most of the home utilities services. The energy production of the city is concentrated in two hydroelectric plants, both with water sourced from the Guatape dam.

EPM and the plan to overcome global warming[4]

EPM recognized the risk of relying on water supply for the generation of energy. The pressure from the city is double due to the income it represents for public investment and the reliance of the city on its supply of energy and drinking water to the mora than three million inhabitants. The strategies that EPM is using to mitigate the effects of climate change are:

  1. Offset negative effects of climate change via environmental investment

Through its affiliate companies EPM is investing in the protection of rivers to maintain the supply of water to hydroelectric dams. The projects are centered around the conservation of river basins and include buying terrains, relocating communities endangering rivers, rezoning of critical areas for water production, and restoring local flora to maintain water production and biodiversity.

  1. Education

EPM is involved with the communities that are around the river basins as part of the BanCO2 project. It recruits families and offers them compensation to engage in springs and forests protection, and teaches them sustainable agricultural, farming and environmental practices. Additionally, EPM has alliances with several NGOs to drive a sustainability education to rural populations in areas that are outside of their area of influence.

  1. Alternative sources of energy

To minimize the dependency on hydroelectric energy EPM has engaged in two ventures, thermoelectric and wind power production.

EPM owns La Sierra thermoelectric center, the most efficient and the second largest in megawatt generation in Colombia. It uses natural gas and oil to produce energy when hydrological conditions require it. The plant has enabled the company to avoid buying energy in the market at higher prices and reduce supply uncertainty during changing weather conditions.

EPM own Parque Eolico Jepirachi (Wind park Jepirachi), the first of its kind in Colombia. It is located in the northeast most region in Colombia, and besides providing alternative sources of power, has given for the first-time access to native population to electric power in their communities.

What next?

Although the steps are going in the right direction, they have been shy in comparison to the importance and influence of the company in Colombia. To protect the country from the effects of climate change, and the revenue generation of the company, a broader set of initiatives must be implemented. Unless the company can influence a conjoint effort with the government, multilateral organizations and NGOs, no real significant change will be made in the conservation of the country’s natural resources. Protection of forests and carbon emission reductions has to go beyond the immediate area of influence of the company, and become a relevant national debate that leads to incentives and penalties for sustainability, included in the country’s laws.


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[1] El Tiempo, “Crisis Energetica en Colombia”, January 2016. http://www.eltiempo.com/economia/sectores/crisis-energetica-en-colombia/16472996

[2] El Tiempo, “Incendio en hidroeléctrica de Guatapé puso al país a importar energía”, February 2016. http://www.eltiempo.com/economia/sectores/lo-que-causo-en-el-sector-electrico-de-colombia-la-falla-en-guatape/16520696

[3] Wikipedia, “El Niño–Southern Oscillation”. https://en.wikipedia.org/wiki/El_Ni%C3%B1o%E2%80%93Southern_Oscillation#Warm_phase

[4] Grupo EPM, Company Sustainability report. 2015 https://www.epm.com.co/site/Portals/0/centro_de_documentos/sostenibilidad/resumen-informe-de-sostenibilidad-2015.pdf


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Student comments on EPM, climate change and hidroelectric power

  1. Thanks for starting this Conversation Pablo.

    Seeing as many of the companies in the industry are State owned enterprises (SOE), i would be curious as to your opinion on the role of the shareholder in driving this conversation. As you know, EPM is mainly owned by the municipality of Medellin, making their goals oriented mainly towards meeting a public service, as well as a level of profitability for the city. It is difficult for me to see where the pressure will come from for increased efficiency and renewable development – it seems to me as a society, consumers and shareholders, we are not ready to really place a burden on Colombian companies yet!

  2. EPM is fascinating – a power company in an emerging economy making efforts towards combating climate change is unusual and laudable. What I am curious about is if they have set and communicated targets towards their sustainability initiatives. For example, for #3 – it would be impressive if they have set public targets on % of power generated through sustainable sources. The burden for a company like EPM is that they can set the standard for the rest of the industry in Columbia!

  3. I view EPM as a leader in delivering public energy in a sustainable manner, whether that is through hydroelectric power stations, thermoelectric power stations, or wind farms. Having spent part of my life living in cities where energy sources heavily contribute to global change (and negatively affect the environment), I wonder to what extent other countries would be able (and willing) to replicate the EPM model, and what it would take for them to do so.

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