Energy Profile-Peru

From Global Energy Monitor
This page is part of Global Energy Monitor's Latin America Energy Portal.
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Fuel mix (fossil fuels vs renewables)

Roughly three quarters of Peru's total energy supply comes from fossil fuels, with oil accounting for approximately 43%, followed by gas (26% to 31%, according to various recent reports) and coal (2%). Hydropower is the most prominent form of renewable energy[1][2][3], representing 35% of installed electrical capacity and 55% of electrical generation in 2019.[1]

Peru's national energy policy (Propuesta de Política Energética de Estado Perú 2010-2040) aims to diversify the country's energy mix, with an emphasis on renewables and energy efficiency to meet the country's long term needs. The Peruvian government acknowledges the volatile prices of fossil fuels as another reason why there needs to be a shift towards renewables that are both high quality and reasonably priced.[4]

Peruvian energy consumption by source, 1990-2019. Source: Our World in Data

Greenhouse gas emissions targets

Due to the impacts of the COVID-19 pandemic and political turmoil, Peru has made multiple adjustments to its original Paris Agreement 2030 target.[5] Former President Martin Vizcarra created a commission to address climate change before his impeachment and removal from office in November 2020.[6] In December 2020, the High Level Commission on Climate Change (CANCC), with the support of interim President Francisco Sagasti, presented a plan to increase Peru's emissions reduction target from 30% to 40% by 2030 if there was adequate financial support from the international community.[7][8] Peru aims to be carbon neutral by 2050.[5]

Source: Climate Watch Data and WacClim[9]

Government energy agencies & other key players

National energy ministry

MINEM (Ministerio de Energía y Minas) is the Peruvian government agency in charge of energy and mining activity. MINEM's sub-agencies include IPEN (Instituto Peruano de Energía Nuclear) and INGEMMET (Instituto Geológico, Minero y Metalúrgico).[9]

Permitting agencies

All large energy projects in Peru are required to undergo a detailed environmental impact study (EIA-d), which must receive final approval from MINEM before construction can begin.[10]

Mining permits in Peru are acquired through various agencies depending on the scale of the project. Generally, INGEMMET grants the mining concession titles for medium to large mining projects, while any small scale or artisanal projects receive permits through the DREM (Regional Directorate of Energy and Mines).[11] In 2021, efforts were made to streamline the mining permitting process.[12]

Regulatory agencies

Peru's Regulatory Agency for Investment in Energy and Mining (Osinergmin) oversees investment in the energy sector, specifically mines, electricity, natural gas, and fuel.[13]

The Peruvian environmental authority OEFA (Organismo de Evaluación y Fiscalización Ambiental) is responsible for ensuring compliance with environmental norms.

Electric utilities

DGE (Dirección General de la Electricidad), a sub-agency of MINEM, has administrative responsibility for all aspects of Peru's electricity sector, including policies, regulations, expansion plans, distribution, and commercialization of electricity.

64 companies (5 state-run and 47 private) were responsible for electricity generation in 2018, while 23 companies (11 state-run and 12 private) handled electricity distribution.[14] In total, 73% of the electrical market is private, with 66% of the total electrical energy commercialized by private companies.[14]

National oil company

Perupetro, Peru's national oil company, is responsible for exploration and development of the country's hydrocarbon resources.[15]

Leading energy companies

Electroperú S.A. (ELP) is Peru's most important state-owned power generation company, producing hydroelectric and thermal energy.[16]

Enel Generación Perú S.A.A., formerly Edegel, is the leading private electric power generation company in Peru, with approximately half of its energy coming from renewable sources.[17]

Luz del Sur, an important energy company primarily serving southeastern Peru, was sold to China Yangtze Power International in 2020.[18]

Energy sector employment data

As of 2017, 12% of the Peruvian workforce was employed in the mining sector.[19] The Arequipa region has the highest level of mining employment.[20]

Source: Statista[20]


Electricity usage

The SEIN (Sistema Eléctrico Interconectado Nacional) is Peru's main electrical system, comprising 28,000 kilometers of transmission lines covering approximately 85% of the country, with remaining areas covered by smaller isolated systems. The two largest transmission companies are Red de Energía del Perú and Consorcio Transmantaro, with a combined market share of 32%.[21][22]

Installed capacity

In 2019, the installed capacity of the Peruvian electrical system was 15,223 MW.[22] In 2018, 54 electrical companies were in operation; the main providers being Engie (20%), Kallpa (13%), Enel (11%) y Electroperú (7%).[22]

Production

In 2019, the Peruvian electrical system produced 54,432 GWh.[22]

Demand

In 2018, 46% of Peruvian electricity was used by the transport sector, with an additional 27% used by the mining & industrial sectors.[22] Residential, commercial, and public use account for 25% of electric usage. Due to mining activity, Moquegua consumes more than seven times the national average of electricity (as of 2018).[22]

Consumption

As of June 2019, 96% of Peruvians had access to electricity.[23] As of 2020, Peruvian per capita electricity use was 1,574 kWh annually, with the entire country using a total of 51.88TWh during 2020.[24] DGER (Dirección General de Electrificación Rural) is a sub-agency of MINEM focused on raising rural access to reliable electricity to 98% by 2023.[25] The electrification efforts in rural areas are supported by national law: Ley de electrificación rural y de localidades aisladas de fronteras-No.27744.[26]

Coal in Peru

Domestic Production

Peru ranked 54th in the world for coal production in 2016 with a total of 493,173 tons .[27]

Consumption

Peru ranked 70th in the world for coal consumption in 2016 with a total of 1,267,657 tons.[27] The country's lone coal-fired power plant, Ilo 21 power station, is scheduled to close by December 2022 as part of owner Engie's broader decarbonization strategy.[28][29][30]

Carbon dioxide emissions nationally in Peru Source: Ministerio del Ambiente - Dirección General de Cambio Climático y Desertificación - DGCCD

Imports & source countries

In 2016, Peru was importing nearly 40% of the coal it consumed.[27]

Oil & Natural Gas in Peru

Domestic Production

Peru's oil development projects are concentrated in the northern Peruvian Amazon, with pipelines leading to the northern coast.[31] More than 95% of natural gas operations occur in the Selva Sur geographic zone.[32] As of 2021, more than 70% of the Peruvian Amazon has been opened to oil and natural gas companies.[33] Peru became the first LNG exporter in South America in 2010 after the opening of Melchorita LNG plant.

Monthly fiscal production of petroleum and LNG in Peru between January-August 2020, Source: Perupetro

Consumption

As of 2019, Peru's energy consumption sources are made up of 43.61% oil and 25.73% natural gas.[3]

Imports & source countries

The majority of Peru's crude oil imports come from Ecuador.[34]

Proposed new sources & projects

Peru has held talks with Bolivia regarding possible importation of Bolivian natural gas via the proposed Bolivia Peru Gas Pipeline.[35] Companies are consistently proposing other new projects, which must go through an exploratory phase before they can move forward.[32]

Transport

Peru's two most important operating pipelines are the 714-kilometer Camisea Gas Pipeline and the 1106-kilometer Norperuano Oil Pipeline. A third, long-stalled project, the Gasoducto del Sur, has been proposed to transport gas from the Amazon basin to power plants and population centers in southern Peru. Transportadora de Gas del Peru (TGP) is responsible for the transport of oil and natural gas within and out of Peru. Its system is formed by two sets of ducts: one for natural gas and the other for natural gas liquids.[36]

Renewable Energy in Peru

As of May 2019, renewable energy produced within Peru came from the following sources: hydroelectric (43%), wind (40%), biomass (12%), and solar (5%).[37] Peru aims to triple renewable energy production between 2019 and 2030; in 2019 the country maintained approximately 15,000 MW of energy generation capacity from renewables alone.[37] Renewable energy in Peru is slated to grow by approximately 6% between 2021 and 2026.[38]

Iron & Steel in Peru

SIDERPERU, Peru's oldest and largest iron & steel producer, is owned by the Brazilian company Gerdau. The United States, Colombia, and Belgium are notable purchasers of Peruvian iron and steel.[39] Investment in new iron ore mines is planned for the Arequipa region.[40]

Environmental & social impacts of energy in Peru

Oil and gas exploration contributes to deforestation, displacement, and soil & water pollution in the Amazonian jungle.[41] Companies have dumped waste products from mining and hydrocarbon development directly into Peruvian rivers and forests.[42] Between 2000 and 2019 there were 474 oil spills in the Peruvian Amazon, 65% of which occurred due to corroded pipelines and operational failures.[43] Environmental monitors are usually the first to report spills to the regulatory agencies.[44] Oil spills in the Peruvian Amazon have been devastating indigenous communities principally because the spills contaminate food and water supplies as well as crops.[45] Additionally, negative health outcomes often occur in oil spill areas, prompting protests and calls for oil and gas companies to pay for healthcare costs.[46] Despite orders to stop production following a spill, some companies continue to pump oil and use faulty pipelines.[47] Indigenous groups have protested against oil and gas companies for years.[41] Pipelines in Peru are also at risk due to seismic activity, heavy rains, and mudslides.[48][49] Billions of dollars are needed in order to adequately clean up contamination from oil spills in Peru.[50]

Spills due to corrosion and operating failures in Amazonian lots and the ONP (2000-2019) Source: La Sombra del Petróleo

Mining, particularly gold mining, has led to extensive water pollution in Peru.[51] Deglaciation due to climate change could limit Peru's ability to use renewable hydro powered plants in the future.[52]

References

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