Opportunities for Swiss Service and Equipment Providers
PERUVIAN PRIVATE ENERGY MARKET
OFFICIAL PROGRAM
PERUVIAN PRIVATE ENERGY MARKET The strong economic growth in Peru over the last decade has enhanced its energy market, which is expected to further expand in the future. Traditionally Peru satisfies most of its energy demands with hydropower. However, during the last ten years the use of natural gasfired thermal power plants has increased substantially. This is due to the fast growing demand for energy, the fact that the development and construction of gas-fired thermal power plants is quicker and the availability of domestic natural gas from the Camisea gas fields at an affordable price. Peru’s major challenge is to satisfy the future demand for energy, because it is expected that the current pipeline of projects will not be sufficient to cover the potential growth of the future consumption. It is very likely that the ideal reserve margin will not be met this year, and shortage in energy will start by 2017 at the latest. Most of the future demand for energy is intended to be covered by hydropower and natural gas-fired plants; nevertheless, the Peruvian State also wants to diversify and increase the use of renewable energy sources such as wind, solar, biomass and geothermal. In order to achieve the successful implementation of current and future projects, services and equipment will be required, and this is creating opportunities for new entrants and the introduction of new products to the Peruvian Energy Market. Date: July 2014 Language: English Number of pages: 136 Author: Richard Ludwig Andreas Marohn (M.A. HSG) Phone: +51 949 287 625 E-mail: richard@marohn.ch Other architectural reports: Are you interested in other reports for other sectors and countries? Please find more reports here: www.s-ge.com/reports
DISCLAIMER The sources of information used in this report is believed to be reliable and presented in good faith. Neither the author nor the Switzerland Global Enterprise can be held liable for data presented which might not be complete, accurate or up to date. The information given in this report does not have legal or juristic character unless otherwise specified.
Table of Contents
PURPOSE AND STRUCTURE OF THE REPORT _____6
3.2.1. Opportunities during Development ___________ 36 3.2.2. Opportunities during Construction ___________ 38
1. PERUVIAN ENERGY MARKET _________________7
3.2.3. Opportunities during Operation _____________ 39
1.1. Introduction _____________________________ 7
3.3. Common Procurement Practices of Companies ____ 40
1.2. Overview of the Energy Market ________________ 8 1.2.1. Market Structure _________________________ 8 1.2.2. Major Institutions in the Peruvian Energy Market __ 9 1.3. Supply ________________________________ 12 1.3.1. Energy Generation _______________________ 12 1.3.2. Energy Transmission _____________________ 16 1.3.3. Energy Distribution ______________________ 19 1.4. Demand _______________________________ 20 1.4.1. Energy Generation _______________________ 21 1.4.2. Energy Transmission and Distribution _________ 23
4. USEFUL INFORMATION _____________________ 42 4.1. Introduction ____________________________ 42 4.2. Framework for Doing Business in Peru __________ 42 4.3. Networks and Entities Promoting Investments and Development ______________________________ 42 4.4. Sources of Information _____________________ 43 4.4.1. Events and Expositions ___________________ 43 4.4.2. Useful Information Online _________________ 43
5. CONCLUSIONS AND RECOMMENDATIONS _____ 45
1.5. Future of the Peruvian Energy Market ___________ 23 1.5.1. Future Development of the Market ____________ 23 1.5.2. Major Challenges ________________________ 24 1.5.3. Strategy of the Government _________________ 29
ATTACHMENTS ______________________________ 46 Attachment 1: Energy Generation Projects ___________ 46 Attachment 1.1: Projects in Operation ______________ 46 Attachment 1.2: Projects under Construction _________ 72
2. MAJOR PARTICIPANTS AND THEIR PROJECTS _30
Attachment 1.3: Projects under Development _________ 75
2.1. Introduction ____________________________ 30
Attachment 2: Energy Transmission Projects _________ 83
2.2. Major PARTICIPANTS in the Peruvian Energy Market 30
Attachment 2.1: Projects in Operation______________ 83
2.2.1. Energy Generation_______________________ 30
Attachment 2.2: Projects under Construction _________ 118
2.2.2. Energy Transmission _____________________ 32
Attachment 2.3: Projects under Development ________ 122
2.2.3. Energy Distribution ______________________ 32
Attachment 3: Energy Distribution Projects __________ 124
2.3. Projects in the Peruvian Energy Market__________ 33
Attachment 4: Index of Abbrevations ______________ 134
3. BUSINESS OPPORTUNITIES__________________35 3.1. Introduction ____________________________ 35 3.2. Products and Services RequireD ______________ 35
List of Tables
Table 1: Overview of the Peruvian Energy Market in Numbers ........................................................................................ 12 Table 2: Energy Production in Gigawatt hours by Primary Source of Energy ............................................................. 13 Table 3: Energy Production in Gigawatt hours by Generation Technology .................................................................. 13 Table 4: Effective Capacity by 2013 in Megawatt ................................................................................................................... 13 Table 5: Evolution of the Participation of Domestic Natural Gas in the Generation of Energy .............................. 14 Table 6: Evolution of Transmission Systems ......................................................................................................................... 17 Table 7: Capacity and Peak Demand in Northern, Central and Southern Areas ........................................................ 22 Table 8: Expansion of the SINAC .............................................................................................................................................. 23 Table 9: Reserve Margin of the SINAC .................................................................................................................................... 25 Table 10: Demand major Mining Projects .............................................................................................................................. 25 Table 11: Reserve Margin of the SINAC, in the Northern, Central and Southern Zones .......................................... 27 Table 12: Major Energy Generation Companies connected to the SINAC .................................................................... 30 Table 13: Major Energy Transmission Companies connected to the SINAC ................................................................ 32 Table 14: Major Energy Distribution Companies connected to the SINAC .................................................................. 32 Table 15: Number of Companies with Generation, Transmission and Distribution Projects ................................ 34 Table 16: Opportunities during Development....................................................................................................................... 36 Table 17: Opportunities during Construction ....................................................................................................................... 38 Table 18: Opportunities during Operation............................................................................................................................. 39
List of Figures
Figure 1: Interaction between Supply and Demand of Energy in the Peruvian Energy Market............................... 9 Figure 2: Principal Institutional Structure of the Peruvian Energy Market .................................................................10 Figure 3: Percentage of Effective Capacity according to the Primary Source of Energy ........................................... 14 Figure 4: Evolution of Energy Generation Matrix in Peru ................................................................................................. 15 Figure 5: Existing Generation Facilities .................................................................................................................................. 16 Figure 6: Existing Transmission Lines.....................................................................................................................................18 Figure 7: Current Distribution Areas ....................................................................................................................................... 19 Figure 8: Mining Projects in operation, Expansion and Exploration ............................................................................ 20 Figure 9: Coverage of Maximum Demand ............................................................................................................................... 21 Figure 10: Growth of Peak Demand and Energy production ............................................................................................ 22 Figure 11: Development Energy Demand ............................................................................................................................... 24 Figure 12: Development Energy Demand with Thermal Energy Project in the Southern Part of the Grid ........ 28
Purpose and Structure of the Report The purpose of this sector report is to provide an insight into the Peruvian private energy market and to identify opportunities for Swiss services and equipment providers. To achieve this objective, the sector report is subdivided into five main chapters. The first chapter will give you an insight into the Peruvian energy market, starting with an overview about the market, including its structure, major public and private institutions, energy demand and supply, major challenges, outlook and government strategies. The second chapter presents the major companies involve in the generation, transmission and distribution of energy, and their projects. After having a clear understanding of the market, knowing the major companies and their projects, chapter three identifies business opportunities for Swiss service and equipment providers. To facilitate access to the Peruvian energy market, chapter four offers some useful information and suggestions for starting and doing business in Peru. Finally, chapter five provides conclusions and recommendations.
PERUVIAN PRIVATE ENERGY MARKET
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