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    COES: Urgent need to develop more power generation projects before 2025 or 2026

    March 24, 2023 - CE Noticias Financieras


        The Economic Operation Committee of the National Interconnected System (Coes) urged the government to "do something before 2026" to prevent diesel power plants from starting to generate expensive and polluting electricity on a permanent basis.

        This, in the absence of new efficient (cheap) electricity generation projects, such as wind, solar, hydro and natural gas.

        "If more efficient generation projects are not built by 2025 or 2026, we will have to burn diesel during low water seasons and there will be a cost problem for electricity generators," warned César Butrón, president of Coes, at the Peru Energy North forum.

        He explained that, if this happens, electricity generators will be forced to pass on this cost to their clients: free users and electricity distributors (who supply energy to homes) in the medium or long term.

        "This is a direct message to the Executive: investment projects must be promoted in generation plants with cheap prices, which arrive on time (...) and we do not have to produce energy with diesel, which is not only expensive but also more polluting", said Butrón.

        According to Coes projections, in a conservative scenario, the absence of efficient electricity generation since 2025 will increase diesel consumption from 100 MW to 2,100 MW by 2034, a volume equivalent to 20% of the total installed capacity of the electricity system by then.

        The Coes warned that this adverse scenario would be avoided if the Peruvian southern gas pipeline (today called SIT-Gas) manages to bring Camisea gas to the Peruvian south before 2026, as it would allow the immediate generation of 1,500 MW of 'cheap energy'.

        This not being the case, Butrón points out that the solution lies in making the nearly 20,000 MW of EPO projects in the Coes portfolio viable. That is, the "projects approved and under review that already have their own name, location, and are ready to obtain the concession and start building".

        IN ECONOMY : Economic growth in Peru: Experts indicate that the country may not grow this quarter, what are the reasons?

        These are mostly renewable projects: 10 thousand MW of solar and 9 thousand MW of wind, which only need two conditions to be developed.

        One is that the Ministry of Energy and Mines commits to speed up their construction and prevent them from being paralyzed for "reasons that have nothing to do with the electricity sector", said Butrón.

        And another has to do with the commercial framework that private operators must resolve to obtain financing, which involves going to a client (mining or industrial), convincing them to sign a power supply contract for at least 10 years, and taking that contract to a bank to raise capital.

        "There is no technical obstacle as the (electricity) system supports 1,000 MW more solar and wind projects today. The obstacle is the business model and how to put it together," said Butrón.


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