Peru’s renewable energy development reality check
Only a small number of renewable energy projects in Peru will be built, according to César Butrón, president of the country’s power grid coordinator COES.
“There is not enough demand for all the interest that is developed,” he said during a panel at Prensa Grupo’s Perú Energía Sur online event.
“This implies that a much smaller portion is going to be actually built unless there is some regulatory modification, unless there are special auctions for renewables, or unless they become so competitive that they displace incumbent generators that have a combination of hydroelectric power with natural gas.”
He highlighted that COES-approved pre-operational studies (EPO in Spanish) for wind, solar, hydro and thermo reach 3,933MW, 3,446MW, 1,715MW and 1,236MW. EPOs under revision for wind, solar and hydro total 4,564MW, 5,599MW and 1,185MW.
An EPO is used to show that a proposed plant and associated transmission infrastructure will not hinder the expansion of the national grid or impact the system’s safe and reliable operation.
Butrón pointed to a slowdown of the economy that impacted previous demand forecasts, but stated that offtake may vary if mining is reactivated.
The COES head added that amid this outlook, there is enough efficient generation reserve through 2028.
Fellow panelist Carlos León, legal and regulation manager at Kallpa Generación, pitched the need to fine-tune the EPO process to guarantee project advancement.
León pointed to work in Colombia to determine how to best assign capacity through the use of variables related to efficiency, grid security, emissions reductions and marginal costs.
“We are not in the best of times when we [don’t] have annual demand growth that can trigger some projects,” event participant Daniel Camac, deputy country manager for Engie in Peru, said.
Camac did however pin hopes on green hydrogen as a driver for renewable energies.
For Luis Flores, regulatory affairs manager at Enel Generación Perú, the regulatory framework has not kept pace and remained static with a hydro-thermo focus.
“Solar plants today cannot sell to a distributor, for example, that is something that is unacceptable,” according to Flores, who also stressed the need to ensure fulfillment of transmission plans to allow dispatch from renewable plants.
Also Read How Statkraft sees the Peruvian market and Peru advancing power sector reform work
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