This past November, the Italian company Enel Green Powerannounced that its Peruvian subsidiary, Enel Green Power Peru (EGPP), “has started the construction of Rubi, which will be the first solar [photovoltaic, PV] plant to be built by the Group in Peru and, once completed [in 2018], will be the country’s largest PV facility with an installed capacity of 180 MW1.”
To confront climate change, recently best exemplified by the extreme El Niño weather patterns that have hit Peru, a growing number of governments across the world are aggressively promoting the use of green, renewable energies. The EGPPplant in Peru is a promising development, and the Andean country has a lot of potential for clean energy, however, how much of it is being capitalized upon is debatable.
Projects and Possibilities
Over the past year, there has been a constant stream of positive articles about Peru’s interest in and the potential for clean energy. For example, the country made news in February 2016, when the state agency Organismo Supervisor de la Inversión en Energía y Minería (OSINERGMING)approved 13 projects that dealt with renewable energy and which will produce 1739.2 GWh per year. Six of the projects have to do with hydroelectricity, while three are related to wind energy; they are located across the country, in regions like Ancash, Cajamarca, Lima, Moquegua and San Martin, a government press release explained.
Later, a 4 June 2016 article in the daily La Republica announced that the Andean nation is the fourth most attractive country in South America to invest in renewable energies, and 24th at the global level, according to a report by the Renewable Energy Country Attractiveness Index – EY – Global. The report notes the potential for development of hydro and geothermal energy in the country.
That same month, Peru’s ESAN Graduate School of Business published an interesting short articleabout clean energy in Peru, discussing how hydroelectric plants produce as much as 85% of the country’s electricity, and how the Camisea Gas Project will be another major source of clean energy for the country. As for other types of energy, solar energy is utilized in remote areas in the Andes and Amazon where traditional power lines cannot reach, while geothermal plants could potentially be set up in the south (e.g. Moquegua), by harnessing the power of Andean volcanic chains.
The Need For Energy
Akin to nations that depend on one or two non-renewable energies, like coal or oil, Peru must diversify its dependence on hydroelectricity. One of the authors, a native Peruvian, remembers growing up in Lima during times of little rain, which meant that the water level of the Rimac River was low, causing cuts in both electric and water supply. Climate change and future El Niño weather patterns will continue to exacerbate the situation, hence it is important for Peru, and the capital, in particular, to not rely on this, or any, sole energy-producing industry.
Another reason to promote this diversification has to do with population growth. Peruvians numberover 31 million by now and this number will only grow in the near future, putting greater stress on current energy industries as they have to serve even more consumers. This will become a greater problem as rural and isolated areas in the Andes and Amazon grows and will require that the government provide basic services.
President Pedro Pablo Kuczynski (2016-2021) has pledged to improve infrastructure nationwide and provide water and sewage access to 10 million Peruvians who live in isolated areas. The logistics of this pledge are complicated, particularly given Peru’s roughed and difficult topography. Nevertheless, greater energy access could become a reality for even more Peruvians if the government capitalizes on clean energy sources depending on the region, particularly solar, for the Andes and Amazon, and geothermal for the Southern areas, akin to what Iceland has done , as“geothermal power facilities currently generate 25% of the country’s total electricity production.” The country’s ongoing population growth makes the government’s need to diversify its pool of energy industries a pressing priority.
The 20116 approval of 13 green energy projects is the fourth round of such contracts that have been approved in the past decade (the other rounds were approved in 2010, 2011 and 2013). The proposed projects, if they go as planned, will be most beneficial to Peru, as population growth and extreme weather patterns underscore that the Andean country must not continue to rely solely on hydroelectricity and must diversify its energy portfolio in the near future.
W. Alejandro Sanchez is an analyst who focuses on international security and geopolitics. Follow him on Twitter: @W_Alex_Sanchez . Brittney J. Figueroa is a recent graduate from the University of California, Santa Barbara with a Bachelors degree in Global Studies, and a Minor in Latin American Iberian Studies. The authors wish it to be known that the views presented in this essay are their sole responsibility and do not necessarily reflect those of any institutions with which the authors are associated.