Peru’s executive branch has introduced a bill to congress to promote the diversification of the energy matrix.
The proposal would allow power distributors to procure capacity and energy independently in supply tenders, a change that stakeholders, particularly renewable energy companies, have spent years calling for.
Power supply calls are expected in the near term as certain contracts between distributors and generators are scheduled to expire.
“The decreasing trend in renewable technology development costs will be used to establish better rates for final consumers, reducing the application of subsidies to renewable energies in the current regulatory framework,” according to the draft legislation, which would modify law 28832, governing the guarantee of efficient power generation development.
The document, available here, in Spanish, adds that the “proposal strengthens free competition in the Peruvian electricity market and equality between all technologies, eliminating regulatory barriers … and will reduce dependence on fossil fuels.”
The energy and mines ministry released a draft bill for consultation last June.
“It would be a good incentive for the construction of new renewable generators, as contracts with distributors would be for 10, 15, 20 years,” Rolando Salvatierra, a senior partner and energy expert with Lima-based law firm Estudio Muñiz, told BNamericas.
Salvatierra forecasts that 2023 will be a watershed year for renewables in Peru, with the potential announcement of a new renewable energy auction. The last process was launched in 2015.
Nevertheless, the sector analyst highlighted sector instability brought on political turmoil. “As of 2016, we have had six presidents and about 20 ministers of energy and mines so far,” he said.
Other hurdles pointed to by sector agents include the need for long-term pledges by electricity offtakers to help underpin renewable energy investments, the need to fast-track transmission infrastructure and pushing forward with norms related to complementary services, such as battery storage.
Source : Bnamericas