Energy is indispensable for the economic development of a country. Rapid demographic growth, expansion of the industrial sector, accelerated technological growth, amongst other factors, have increased the demand of energy and, thus, the electric system has become less likely to satisfy energy consumption. In addition, energy generated by non-renewable resources, such as fossil fuels, have a negative impact on the environment. On the other hand, energy generated by renewable resources solves the environmental issue and makes it possible to diversify the energy matrix. Colombia has a wide variety of natural resources; most of the energy generated in the country comes from renewable resources, mainly from hydroelectric plants. Therefore, renewable energy plays a fundamental role in the Colombian economy; and it is of utmost interest to study the impact energy has on the economy by reviewing the main academic contributions from Latin American countries with an emphasis on the Colombian economy. A VAR model is used to quantify the impact of the energy variables (demand and energy price) on the Colombian GDP.