On June 24 and 25, Expo Energía Perú 2024 took place, an event where representatives from the public and private sectors analyzed the country's situation and shared the challenges and opportunities of migrating towards a cleaner and more sustainable energy mix.
In this context , the Engineer.
César Butrón, president of the Economic Operation Committee of the National Interconnected System (COES) , along with authorities from the Ministry of Energy and Mines (Minem), described the current state of the Peruvian electrical system and projected probable scenarios looking toward 2030. "The projected energy demand in Peru will grow slightly above 3% annually for the next three or four years , requiring between 6,200 and 9,500 MW of new generation capacity. However, to date, there are no new large industrial projects to contribute to the growing demand for more energy," Butrón stated.
According to the COES's project pipeline schedule for generation projects through 2027, there are 26 projects to produce 4,276 megawatts (MW), with investments totaling US$5.749 billion, most of which are currently behind schedule. In this context, Burton asserted that even if these projects are completed on time, they will not be enough to meet projected demand in the coming years.
According to the president of COES, while it is necessary to add more renewable energy, the main barrier to overcome for the development of renewable projects is access to financing. In this regard, the effects of the last El Niño phenomenon revealed that hydroelectric power is insufficient to meet the country's energy demand and that there is a significant deficit in electricity production capacity. Indeed, Elvis Tello Ortiz, Director General of Electricity at the Ministry of Energy and Mines (Minem) , admitted that in 2023, due to the collapse in hydroelectric production caused by the drought , diesel-powered plants had to be used, which increased the marginal costs of electricity production in Peru.
These climbed to US$200 per megawatt hour (Mw/h), when they commonly fluctuate around US$30 per Mw/h. "We are heavily dependent on hydroelectric and thermal sources.
"Energy policy has not achieved the expected diversification. We had a water deficit in 2023 that made us work with more gas than usual, but it wasn't enough either and we started using diesel," he argued.
In this way, Tello Ortiz emphasized the need to reduce dependence on fossil fuels by promoting unconventional energy sources.
To that end, he considered it beneficial to move forward with Bill 28832, which aims to make renewable energy more competitive. This regulatory bill proposes two fundamental changes to the electricity market: separating energy and power capacity in supply contracts and establishing time-of-use blocks, similar to the Chilean model. The current law mandates contracting power and energy together, which limits the participation of solar power plants.
Therefore, this change would allow all electricity generation technologies to participate in the supply tenders of distribution companies. "We are almost 500 MW away from starting to dispatch electricity with diesel, and that could intensify in dry years (...) Today, the goal is greater efficient generation with competition from neutral energy sources, opening the possibility for distributors to carry out energy and power supply tenders, either separately or jointly," he concludes.