IEEJ : July 2013

PERU
Country Report

Alex Rojas Aucarure
Regulatory Body for Energy and Mining Investment (OSINERGMIN)
June, 2013

ParticipantAlex Rojas Aucarure
SpecialistRegulatory Body for Energy and Mining Investment
OSINERGMIN
Phone: (51-1) 2193400 Ext.1602
RPM/Cel: # 990 465 738
E-mail: arojas@osinerg.gob.pe

OSINERGMIN is a public institution of the Peruvian State, which has
functional autonomy, technical, administrative, economic andfinancial, whose functions are to regulate, supervise and control at
the national level compliance with laws and technical in activitiessectors of electricity, natural gas, oil and mining, as well ascompliance with legal and technical rules concerning safety andenvironmental protection in the development of these activities.

1. PERU: General Information

PERU
AREA

1,29

Mill Km2

POPULATION

30,2Mill

PIB P. CAP

10.0 K US$

YOUR LOGO

2. PERU: Macro economy

13%

Peru grew by about 13% in nominal dollar GDP in 2012 compared to 2011 and YOUR
is dueLOGO
primarily
to the real growth of 6.3% in the product3. Current Energy Policy and measures
Long – Term Energy Policy(D.S. 064-2010-EM)View
An energy system which satisfies national
demand in a reliable manner, efficient andcontinuous, which promotes sustainable
development and to support the planning andcontinuous technological research andinnovation..
YOUR LOGO
http://www.minem.gob.pe/3. Current Energy Policy and measures¿
What are the objectives of energy policy in Peru?
Peru?
¿WhatThe State energy policy covers five main points:
1. Energy Security.
2. Conservation of energy resources.
3. Fair and stable prices.
4. Developments friendly environment.
5. Social Inclusion.
YOUR LOGO

3. Current Energy Policy and measures
Energy Policy long –term–term064-2010-EM)(D.S. 064-2010-EM)• Have a diversified energy mix with emphasis on renewable sources.
• Have a competitive energy supply.
• Universal access to energy supply.
• Have a greater efficiency in the supply chain and energy use.
• Achieve self-sufficiency in energy production.
• Develop an energy sector with minimal environmental impact.
• Develop the natural gas industry, and its use in home activities, transportation, tradeand industry as well as efficient power generation.

• Strengthening of the institutions of the energy sector.
• Integrate with regional energy markets, allowing the achievement of long-term vision.
YOUR LOGO
http://www.minem.gob.pe/3. Current Energy Policy and measures
Measures for Energy Sector Development
1.

Planning sector in the medium and long term based on the diversification of
the energy matrix, ensuring coverage of demand.

2.

Efficiency of the state as an agent planner and investment promoter, being acomplementary agent for private participation in strategic projects.

3.

Improved policy consistent with industry developments.

4.

Establish mechanisms for the sustainable management of the sector withsocial responsibility, environmental conservation and communities priorconsultation.

YOUR LOGO
http://www.minem.gob.pe/3. Current Energy Policy and measures
What are our tools?
1. Transmission Planning (Law No. 28832)
2. Generation Planning (for instrument)
3. Bids for Transmission (Law No. 28832)
4. Bids for Generation (Law No. 28832, Proinversion)
5. Cold Reserve Tender (D. L. No. 1041)
6. Auctions for generation RER (D. L. No. 1002)
The investment is the result of bidding on contracts awarded that guarantee set firm
prices for energy or service offered. Long-term contracts up to 20 years (generation)and 30 years (transmission).
http://www.minem.gob.pe/

YOUR LOGO

3. Current Energy Policy and measures
Short-Term Actions
Short-Term
 Schedule a tender cold reserve in southern Peru to enter into operation in 2016.
 The safest way to achieve hydroelectric capacity is required by 2016, an auction isby RER (for the short time remaining), which could be awarded 200 MW of smallhydroelectric.
 Convene bids for Hydro, to come into operation on 03 stages (2017, 2018, and2020).
 To ensure the capabilities required in the SEIN Hydro, is essential to ensure PPA
for bids, so it is necessary to make adjustments to the Regulatory Framework.

YOUR LOGO
http://www.minem.gob.pe/

National Interconnected Electric System (SEIN)

4.

Energy Demand and Supply (statistics)
Perú to 201230 Million Inhabitants

35,7 TWh ofElectricity
Consumed
40,9 TWh ofElectricity Produced

400 Billion Soles(140 Billion U.S. $) of GDP

22,0 TWh (54%)
Hydroelectric

172 thousand barrels per
day of Fuel Consumed
72 thousand barrels per
day of Oil Produced

1.7 million vehicles

90%

500 TJ/D GN
Consumed in Peru

Thousands of Units
Cars

767

44%

Station wagon

275

16%

Trucks438

25%

Omnibus to more

253

15%

Total

1733

100%

7.5 Million Homes
5.5 Million Homes withElectricity

85 thousand barrels per day ofliquids Produced GN
700 Million Cubic Feet Produced
GN
http://www.minem.gob.pe/

YOUR LOGO

4.

Energy Demand and Supply (statistics)

Guarantee a timely and efficient supply of energy thatdemand the growth and socioeconomic development.

average annualgrowth
2000-2005: 4,7%
2006-2010: 6,8%
2011:

7,9%

2012:6,0%
YOUR LOGO

http://www.minem.gob.pe/

4.

Energy Demand and Supply (statistics)

Supply growth basically Camisea Natural Gas concentrated in the center of the SEIN.
Growing demand, supply centralized insufficient transmission capacity; congestion
The production of electricity with water resources in 2012 accounted for only 54%,
while the 2002 was 88% of total.

YOUR LOGO
http://www.minem.gob.pe/

National Interconnected Electric System (SEIN)

4.

Energy Demand and Supply (statistics)

Energy Sector Characteristics
 Great energy potential: The wide availability of water resources and natural gas has
enabled to meet the growing electricity demand in the country.
 In 2012, 87.2% of the population had access to electricity.
 The 2012 energy matrix, comes mostly from renewable energy (about 56% ofenergy production is hydroelectric, 43.5% is based on natural gas and 0.5% with otherrenewable sources).
 Resources to be discovered and exploited: There are other renewable energy
sources to be explored such as solar, wind, biomass and geothermal sources.
 Power projects portfolio to be invested is over US$ 6.000 billion until 2016.
 The main economic groups of power generation are: Endesa, GDF Suez, IC Powerand Duke Energy.
YOUR LOGO
http://www.proinversion.gob.pe4.

Energy Demand and Supply (statistics)
Energy Sector Characteristics

YOUR LOGO

4.

Energy Demand and Supply (statistics)

Energy Sector Characteristics
 In 2012, natural gas production totaled 418,795 million cubic feet, driven by growing
demand from power plants, increased consumption of vehicular (VNG), domestic andcommercial natural gas.
 Peru is the only sustainable source of natural gas in the South American Pacific area.
 Peru has oil fields that have not been explored (29.97 million ha), making it a potential
petrochemical hub.
 The petrochemical industry integrates with the production of natural gas and otherliquid hydrocarbons, giving it a significant added value.
 Among the products produced by the Final Petrochemical Industry are fertilizers,
plastics and detergents.
 Investment opportunities for US$ 8.650 billion for the construction of 3 ammonia plants,
2 ammonium nitrate plants, 2 urea plants and one ethylene plant.
YOUR LOGO
http://www.proinversion.gob.pe

4.

Energy Demand and Supply (statistics)
Energy Sector Characteristics

YOUR LOGO4.

Energy Demand and Supply (statistics)

Renewable Energy Potential / / "Objective: Strategic Exploitation"

Hydroelectric Potential
69 445 MW (1)Wind Potential
22 450 MW (2)Geothermal Potential
3 000 MW (3)Solar Potential (4)Highlands: 5.5 – 6.5 kWh/m2
Coast: 5.0 – 6.0 kWh/m2
jungle: 4.5 – 5.0 kWh/m2
(1)
(2)
(3)
(4)

Atlas del Potencial Hidroeléctrico del Perú – (DGER-MINEM, BM y GEF), Marzo 2011
Atlas del Potencial Eólico del Perú – (http://www.foner.gob.pe/atlaseolicolibro.asp)
Battocletti, Lawrence, B& Associates, Inc (1999) “Geothermal Resources in Peru
Plan Maestro de Electrificación Rural con Energía Renovable en el Perú (DGER-MINEM)

The main renewable energy resource Peru, is the hydro.
There is significant potential for wind and solar resources, however electricity generation based on these resources do
YOUR LOGO
not provide the continuity and reliability of service that is required to strengthen security of supply in the interconnected
electrical system nations - SEIN.

4.

Major Difficulties and bottlenecks currently faced informulating energy policies

In Peru there are two risks:
1) Pipeline rupture Camisea gas supply, the same which means less in 2700 MW
thermal plant operating area and can last up to 30 days..
2) Landslide dam CH 5 of the Mantaro, which would leave 850 MW hydropermanently. This event is classified as low-probability, high severity..
Then, it is required to have a sufficient reserve margin to mitigate major contingencies.
That is, to restore at least 30% this referred margin.
Also, when the failure happens gas pipeline, almost doubles the consumption of liquid
fuels for power plants operating in dual mode (the normal operating condition ofthese turbo gas is natural gas), and the rest of inefficient thermal plants operatingwith diesel fuel. Therefore, security is required timely supply with adequate reserve
margins.

YOUR LOGO

4.

Major Difficulties and bottlenecks currently faced informulating energy policies

Major Obstacles: In our country for over three decades was not a explicit long-term energy policy .
 At present, we have an energy policy that promoted the participation of clean energy that is minimal (energies that
impact the environment). The one that appears on the cake is solar energy with 0.05% interest, practically nothingcompared to diesel which covers 28.84%.
 Lack develops long-term Energy Policy, that is, we develop hydropower and wind power. The challenge presented
is that its construction takes longer than five years and the question is who is going to open? Does this government?.
 Lack diversifies energy sources, despite the investment cost can mean, as it has made other countries like the U.S.,
where it comprehensively addressed problem, whereas in our country need much qualification, respect for rules andresearch technology.
 Lack develop geothermal and insurmountable obstacle at the moment is that we should be able to dig at least 6
miles deep, where we have temperatures of 300 degrees and use the heat of the Earth. In Peru do not have theinfrastructure and technology necessary.
 Do not ha a plan to invest resources efficiently. We believe that before delivering energy in rural zones, you have topromote a process of change in the sense that must be exploited its productive use of electricity to generate wealth.
We must not only deliver energy, instead of it we should think its use to productive purposes.
 In March this year, through a letter to the Peruvian government, the Committee on the Elimination of Racial
Discrimination UN requested immediate suspension of plans for expansion of the Camisea project in the Nahua Nanti (Cuzco), because it "threatens the physical and cultural survival of indigenous peoples who live there".

YOUR LOGOSubjects I would like to study:Priority

Subject

ReasonVery Important

Electric DemandManagement (EDM)

EDM can bring benefits on many levels, could help my country
to reduce oil consumption and carbon emissions.
It could also help to increase energy security, and leverage theopportunities of the regional electricity market. Also allow better
integration of new technologies such as electric vehicles andalso reduce the need for expansion of the power system.
Moreover, MDE strategy would force utilities to become more
efficient and reduce generation costs and consumers could pay
less for electric service. In summary, work to solve the energy
problem

Mildly Important

Load Rejection

To prevent collapse of the electrical systems is restored
allowing generation-load balance to an appropriate rate andimprove the reliability of electric supply

Important

Smart GridsTo ensure the efficiency and sustainability of power systems
with low losses and high levels of quality, safety and reliability ofelectric service.

YOUR LOGOTHANKS
Alex Rojas Aucarure
Specialist
Regulatory Body for Energy and Mining Investment
OSINERGMIN
Phone: (51-1) 2193400 Ext.1602
RPM/Cel: # 990 465 738
E-mail: arojas@osinerg.gob.pe

YOUR LOGO

Contact : report@tky.ieej.or.jp