Peru unveils new bill that could kickstart more wind development

The Peruvian government has sent legislation to Congress to accelerate development of its renewables sector by promoting greater competition in the power industry.

The bill has been sent to Congress following a public consultation (pic credit: Cris Bouroncle/AFP via Getty Images)

Under the proposed law No 4.656, electrical distribution companies would be allowed to hold tenders to award long-term power supply contracts. This would allow developers to enter renewable energy projects, including new wind farms, and win, thanks to their lower costs compared with conventional technologies.

“The use of non-conventional renewable energy will help to reduce our carbon emissions and facilitate investment in new generation projects with a multiplier effect on the country’s economy,” the energy and mines ministry said in a statement.

"The approval of this bill will mark the beginning of the modernisation of the electricity subsector, which will enable the deployment of smart grids, distributed generation and the electrification of transport. [It will also promote] the production of green hydrogen, for the benefit of all consumers, residential and industrial,” said deputy electricity minister Jaime Luyo.

A draft version of the bill was published for public consultation in June last year, which led to a number of comments and suggestions from industry players being incorporated in the final draft.

It is unclear how approval of the bill will take, given the long-running political crisis in the country. Widespread protests demanding early elections and a new constitution have paralysed much of Peru since the former president, Pedro Castillo, was impeached and arrested last December after trying to shut down the legislature and rule the country by decree.

Peru currently has even operating wind farms with a combined installed capacity of 408MW, according to Windpower Intelligence, the data and research division of Windpower Monthly. A 177MW expansion of Enel Peru’s Wayra wind farm and Engie’s 296MW Punta Lomitas wind farm is expected to lift this figure to almost 900MW by the end of the year. There are at least another 3GW of projects at earlier stages of development.