Electricity sector in Peru
While investment in generation, transmission and distribution in urban areas is predominantly private, resources for rural electrification come solely from public sources.
[5] In an attempt to reduce the country's reliance upon hydroelectricity, the Peruvian government has encouraged greater investment in gas-fired power plants.
It is also responsible for elaborating generation and transmission expansion plans and has to approve the relevant procedures for the operation of the electricity system.
[12] The Energy and Mining Investment Supervisory Body (OSINERGMIN - Organismo Supervisor de Inversión en Energía y Miniería), created in 1996 as OSINERG (Mining competences were added recently, in January 2007), is in charge of enforcing compliance with the Electricity Concessions Law (LCE) of 1992 and is also in charge of ensuring the electricity public service.
Finally, it is responsible for monitoring compliance of the System Economic Operation Committees (COES) functions and for determining biannually the percentages of market participation by the companies.
[13] Finally, the National Institute for Defense of Competition and the Protection of Intellectual Property (INDECOPI) is in charge of monitoring compliance with the Anti-monopoly and Anti-oligopoly Law of 1997.
The companies that stood out for their sales to end-consumers were:Enel (25%), Luz del Sur (22%), Enersur (8%), Edegel (7%), Electroperú (5%), Hidrandina (4%), Termoselva (4%) and Electroandes (4%).
[3] Public distribution companies supply electricity to 55% of the existing clients, with the remaining 45% in hands of the private utilities.
The largest hydroelectric facility in the country is the 900 MW Mantaro Complex in southern Peru, which is operated by state-owned Electroperu.
[15] Construction on the multi-purpose Olmos Transandino Project has been underway since 2006 and in February 2010, the contract for its hydroelectricity power plant is expected to be issued.
[20] Studies from the National Meteorological and Hydrological Service (SENAMHI) have estimated a total windpower potential of 19 GWh/year for Peru, or about 70% of current electricity consumption.
[21] The contribution of wind power to the energy matrix in Peru was negligible in the first decade of the 21st century, with just 0.7 MW of installed capacity in 2006.
12378 regulated the mechanisms of private participation, establishing a system of concessions with commitments to increase generation capacity by 10% annually.
The results of this crisis were severe: in 1990 only 45% of the population had access to electricity, supply only covered 74% of the demand and distribution losses were above 20%.
The restructuring process, articulated in the Electricity Concessions Law (LCE) of 1992, unbundled the vertically integrated state monopoly into generation, transmission and distribution and led the basis for the introduction of private operators and competition for generation and commercialization, with transmission and distribution regulated on the basis of free entry and open access.
This Fund established a cross-subsidy system among consumers that benefits users with monthly consumption below 100kWh through fixed and proportional discounts.
[5] To meet expected demand, total investment needs in electricity generation and transmission between 2002 and 2030 are estimated to be US$16.2-20.7 million.
[11] The structural reform process that started in 1992 unbundled the vertically integrated state monopoly and led to the privatization of the electricity sector.
Although there are about 40 companies that generate electricity for the market, just 4 of them (EDEGEL S.A.A., Electroperú S.A., Energía del Sur S.A. and EGENOR) account for 70% of the total capacity.
The National Environment Commission (CONAM), created in 1994, holds the Environmental responsibilities in Peru and promotes sustainable development.
Its Management Committee consists of 10 members from the national, regional and local governments; economic sector representatives; NGOs; universities and professional associations.
The main objective was to stress the need to incorporate in the country's policies and programs the necessary adaptation measures and to make the population aware of the existing risks and the actions they can undertake to use resources responsibly.
The Program to Strengthen the National Capacity to manage Climate Change and Air Pollution (PROCLIM) was created to implement the aforementioned Strategy.
PROCLIM aims to contribute to poverty reduction by promoting the integration of climate change and air quality issues in sustainable development policies.
[36] Currently (November 2007), there are seven registered CDM projects in the electricity sector in Peru, with overall estimated emission reductions of 800,020 tCO2e per year.
In November 2022, the Inter-American Development Bank (IDB) announced the approval of a US$125 million loan for a 500-kilovolt power line project connecting the electrical grids of Ecuador and Peru.
This initiative aims to construct a 544-kilometer line over five years, boosting cross-border transmission capacity to 680 megawatts and promoting a sub-regional electricity market within the Andean Community free trade area.
The project aimed to increase access to efficient and sustainable electricity services, as well as to improve the quality of life and income generation opportunities in rural areas.
[11] The World Bank approved a loan of US$70 million in September 2021 to finance priority investments in Peru's electricity sector.
Additionally, the project will promote the development of a greener electricity supply with reduced greenhouse gases and provide technical assistance to support the Peruvian government's energy sector reform for post-pandemic economic recovery.
