Contents

Introduction

In April this year, senior energy officials from five Andean countries traveled to Peru's capital to sign the Lima Declaration, a document that includes the first inkling of a plan to link up the region's power grids.

The declaration was actually the latest in a series of similar statements released since 2011, when the energy ministries of Colombia, Ecuador, Peru, Bolivia and Chile created the framework for Sinea, or the Sistema de Interconexión Eléctrica Andina (Andean Electrical Interconnection). The initiative is still in the early stages, but has two main goals:

  1. To create a so-called "Andean power corridor" by building the physical infrastructure to connect the power grids of Colombia, Ecuador, Peru, Bolivia and Chile.
  2. To develop the regulatory framework for cross-border power trade and transactions among these five countries.

The long-term objective is to create an integrated regional power market that spans more than 7,000km. It currently involves governments from both ends of Latin America's political spectrum, and has the support of several of the region's development and intergovernmental institutions.

The appeal behind Sinea is clear. Interconnection would exploit complementarities among the five power markets, which has the potential to boost supply security and reduce the cost of electricity. An integrated market would also allow energy-starved countries like Chile to buy electricity from its neighbors, rather than rely on expensive fossil fuel imports.

"This in the best interests of generators and consumers" of electricity, Peruvian mines and energy minister Eleodoro Mayorga Alba said after the April meeting. "We believe that these agreements and this project will make our electrical systems more secure and resilient and provide benefits for all of the parties involved."

The Lima Declaration includes a roadmap that sketches out a rough plan into 2024. It lays out a series of potential interconnection projects, along with a tentative, gradual timeline for the harmonization of regulations necessary for an integrated power market.

There is still much to be done, much fine print to be hashed out, and various external contingencies on which the project hinges. But the roadmap is an interesting early milestone - one that will serve as a reference point for future discussions - and offers an early glimpse of an ambitious project.

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