New Businesses Aligned with our Climate Strategy
Global compact: Principies 7 | 8 | 9
SDG
Our objective of sustained business growth and our persistent vocation for fulfilling our customers’ needs lead us to undertake a continuous cycle of innovation-related activities and projects, in order to develop new and attractive products and services that increase the value we create for our stakeholders and diversify our portfolio, with the aim of furthering our material topic related to new businesses that fulfill our stakeholders’ expectations and requirements, and of creating value both for the market and for our sustainability.
The energy sector is undergoing a transition towards more sustainable forms of energy, which puts pressure on companies in the fossil fuels industry to decarbonize their current operations and future businesses. For this reason, at Promigas our efforts are focused on:
Investments in Renewable Energy
In 2021, we completed construction and started up operations of 9,7 MWp of distributed solar generation, which increased our installed capacity five-fold compared to year-end 2020 (1.8 MWp).
This is a central issue for solar energy, because the projects only start up nearly one year after having closed the contract.
In other words, revenues are only produced between 10 and 12 months after having made the investment.
Additionally, contracts were closed to build five projects which in combination add 2 MWp to installed capacity, which are expected to begin operation in 2022. In 2020, due to the pandemic, only two projects were signed.
Due to the above, at the end of 2021, Promigas, through its affiliates, had a total of
17,5 MWp of solar power capacity (including projects in operation and under construction), compared to 15.5 in 2020, equivalent to a 13 % increase.
The projects carried out in 2021 have consolidated solar self-generation for industrial and commercial customers as a service provided in the ordinary course of business by the affiliates.
A commercial pipeline was established for this alternative, with customers located in the country’s five regions, in over 19 departments and 70 municipalities.
Five projects began to operate:
CEO: Colombina 1,98 MWp, Olímpica Fase 2 (1 MWp)
GdO: Carrera Shopping Center, 0,125 MWp.
Surtigas: Aguas de Cartagena 5,6 MWp, Centro Comercial Caribe Plaza 0,968 MWp
Contracts were signed for five projects that are scheduled to begin operations in 2022:
CEO: Portal del Prado Shopping Center, Greenland-Banacol and AlicoGdO: Hotel Intercontinental
Surtigas: Juan Autos del Cerro
These five projects are expected to add installed capacity of 2 MWp.
Sustainable Mobility with
Low-impact Emissions2021 was a year of economic reactivation, during which NGV contributed to driving the economy of the country’s households and businesses. In this line, we continued to position this fuel as a sustainable alternative in the light vehicles market, and new green corridors were consolidated in important cargo transportation routes, which are essential for the materialization of high-impact projects in the market of gas dedicated vehicles.At December 2021,our GNCV sales volume totaled 101 millon m3 which represents a 15% increase compared to 2020,and EBITDA totaled
COP 26v billion, equivalent 108%
of the established budget, as a result of the lifting of restrictions arising from the COVID-19 pandemic and the gradual recovery of economic activities in the country.We also promoted the use of green fuels, achieving the change-over of 3,299 vehicles to NGV during the year in our areas of influence.
We also continue to work jointly with cargo transporters and logistics operators on the introduction of gas-dedicated vehicles along the country’s main highway corridors. The efforts during the year achieved the incorporation of 112 new dedicated vehicles.
We additionally strengthened dedicated vehicle offerings, providing additional alternatives to meet business needs.
The joint efforts of Promigas, Naturgas and other agents in the value chain achieved the enactment of Law 2128, which is expected to help promote the importance of NGV for national mobility.
The following are some of the main projects effectively implemented in 2021:
The campaign of a corporate rebate for change-overs to NGV of light vehicles in corporate fleets. This initiative was led by the Mobility Department of Promigas, which brought together 90% of the agents of the gas value chain in Colombia. This campaign was targeted at a new segment for the market of change-overs to NGV.
Thanks to the commercial and strategic management of the mobility team,
112 additional NGV-dedicated cargo vehicles began to travel in 2021 along the highways covered by our distributors Gases de Occidente and Surtigas. The total number of cargo transportation vehicles dedicated to NGV in circulation in the areas of the distributors controlled by Promigas totals 202 units, which represents 28% of nearly 720 such vehicles registered to date in Colombia. Even though consumption has not yet normalized, because they are still in the early stage, these vehicles are expected to consume gas volumes equivalent to the demand of 16,000 Colombian households.
In 2021, the sale of the first simple and last-mile vehicles (packaging) dedicated to compressed natural gas for vehicles was achieved in the area of Valle del Cauca and Bolívar. This opens a new chapter in the supply of dedicated vehicles in Colombia, which until only a few months ago was limited to tractor trailers and passenger transport buses. The aim is for these light vehicles to penetrate the cargo transportation market mainly in the cities, to contribute to the improvement of air quality through the reduction of emissions of CO2 and particulates.
The following are the main results achieved thanks to the new business activities carried out in 2021:
The aim in 2022 is to increase demand for these vehicles in the segments of cargo transportation, mass transport service, last-mile buses and vehicles, and trash compacting trucks, to reach a total of 20,000 dedicated vehicles circulating nationwide by 2030, which will revolutionize cargo transportation in Colombia and will position NGV in this segment. To this end, we will require the establishment of a regulatory framework that promotes a competitive natural gas price in the future, that incorporates instruments to finance this type of technology, and that regulates the benefits of the Gas Law 2128, to establish a clear road map for the mass use of NGV in Colombian cargo transportation.Our target is to reach 4,293 change-overs, or 30% more than in 2021, and to continue promoting the implementation of dedicated vehicles in the mass transport systems (SETP and SITM) in strategic cities in our areas of influence. We expect to introduce over 200 vehicles 100% dedicated to natural gas in 2022, including tractor trailers, special service buses and trash compacting trucks with partner companies in our areas of influence, where there is great market potential and adequate conditions to optimize the benefits provided by Law 2018
on fuel gas. Our efforts will focus on recovering and maintaining the competitiveness of savings in this fuel above 40% of its main substitutes, in oder to ensure that NGV remains attractive to drivers and vehicle owners.
Percentage of investment allocated to low or zero emissions, clean energy or conversion to clean energies
During 2021, COP 30,380 million was invested in conversions to clean fuels, such as NGV, solar and natural gas, among others. Investments made in rebates for light vehicle change-overs to NGV and dedicated projects.
Percentage of revenues from new businesses of low or zero emissions over revenues from new businesses
Revenues from products, services or businesses of low or zero emissions. In 2021, revenues of COP 94,103 millions were achieved from conversions to clean fuels, such as NGV, solar and natural gas, among others. Based on these new revenues, the target to 2025 is to achieve revenues of COP 198,334 million.
