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    Peru's largest hydroelectric power plant is only operating at 40% of capacity

    September 18, 2023 - CE Noticias Financieras


      The Mantaro hydroelectric power plant, the largest in the country, is producing less than 50%, according to the former vice-minister of Energy and Mines, Luis Espinoza Quiñones. The professional refers that the installed power of the plant located in Huancavelica is 1,008 megawatts (MW), but it is only producing 400. This is a sample of the impact of the hydric stress that is strongly affecting the country and, therefore, the hydroelectric generation. As there was not enough rainfall, the flow of the rivers decreased, resulting in lower production. Espinoza refers that this situation has been triggered by the Global El Niño Phenomenon, which is causing drought in the southeastern part of the country and extraordinary rains in other parts of the world.

      If we refer to statistics, the country has 5,180 MW installed from hydroelectric sources, but only 2,000 MW (40%) are being produced, not because there are no hydroelectric plants, but because there is no water.

      Peruvian gas

      The former vice-minister points out that in view of this situation, it is necessary to resort urgently to thermal power plants that operate on gas and we cannot continue to depend on hydroelectric generation. In the south, for example, there are the thermal power plants of Puerto Bravo in the province of Mollendo and Ilo in Moquegua, each with an installed capacity of 720 MW. However, their operation with gas is on hold until the gas pipeline reaches the Peruvian south. In addition, no more thermal power plants have been built. Espinoza points out that the only thing that governments have done over the years is to build transmission lines, when the most sensible thing to do is to build the southern gas pipeline. "Natural gas is the cheapest thing there is, that is why Camisea was built," he said.

      The need of the Peruvian south to have natural gas is urgent. According to the former vice-minister, in the entire south there is an installed power of 2,000 MW with the capacity to run on gas, but they are currently producing based on diesel, which makes it more expensive and uncompetitive.

      The gas alternative, says Espinoza, should be taken seriously, as the El Niño phenomenon is a cyclical event and there will always be an impact. According to his calculations, the country in this 2023 should have a thermal capacity (gas-based) of 4,700 MW. "We don't have it, so we have to use diesel, which is going to imply that the marginal cost will go up" . The marginal cost reflects the price of supplying an additional kilowatt hour (kWh) to the electricity system. In Espinoza's words, it means that the most expensive one sets the price for everyone.

      If the participation of diesel in the generation of energy, in some moments has been at 20%, but the rest of energies, even having a higher participation and lower cost, do not determine the final price. The former vice-minister of the sector, Pedro Gamio, told La República that one of the alternatives was to bet on renewable energies such as solar and wind. However, Espinoza refers that the solution does not lie in that, but in ensuring the system's energy with thermal and not with renewables that are volatile. "This critical situation will generate high prices. If demand behaves like a recession, it might help us. We have to design a more secure and reliable system," he said.


      For this month of September, the Energy and Mining Investment Supervisory Agency (Osinergmin) already announced a slight increase that became effective as of September 4. Electricity tariffs began to suffer an average variation of 0.60% for residential users and 0.26% for commercial and industrial users.


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