Renewable power is still 'an experiment'

PERU: The government of Peru is requesting proposals for 497MW of wind energy, but has admitted that it sees renewables as more of an experiment than part of Peru's core needs.

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"We are interested in looking at new technologies but there is no urgency," says Riquel Mitma, the engineer managing the process at government body the Mining and Energy Investment Supervisory Body (Osinergmin).

The contracts, which total 2TWh, are expressed in terms of the total amout of energy delivered. The government has decided to limit the maximum size of projects based on what it is willing to allow over certain sections of the grid, so each region and sub-division has a maximum size allocated to it.

Most sub-divisions have allowances of 40-88MW, but the proposal rules also create bottlenecks which mean that in some areas a large wind project in one subdivision will exclude other projects in the same area.

The request for proposals will assign 429GWh of wind power, 682GWh of hydropower, and a further 900GWh from other renewable sources. The contracts represent around 6% of Peru's current yearly production. It is up to contractors to decide the project size in terms of megawatts.

The first such request, which lasted more than a year, commissioned 500MW of capacity including three wind projects for a total of 142MW at rates around $110/MW, none of which are yet producing. This time round, the ministry is hoping it will progress much faster.

It also said it has set a maximum price for each form of energy, in dollars per MWh, which it will reveal only if all bids exceed the price. Results will be announced in July. Winning developers must present a construction schedule within 90 days, and begin transmitting before 2015.

Around 60% of Peru's power is hydroelectric and 40% is from natural gas, with marginal amounts of coal and diesel. Since a natural gas deposit in the country began producing in 2004, Peru has been comparatively sheltered from rollercoaster international gas prices and also cycles of drought and deluge that have affected hydropower across the Americas. It does not, therefore, have the same motivations as other Latin American countries, such as Chile, Brazil and Venezuela, to develop renewables.

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