Congress strikes out a law that lowers electricity prices with wind and solar energy

The modification of Law 28832 on energy efficiency, proposed to allow the participation of non-conventional renewable energies (RER) in the regulated electricity market, will have to wait for its reconsideration in the Energy and Mines Commission of Congress, after the bloc led by Fuerza Popular decided to block it to the detriment of 31 million Peruvians who will not be able to aspire to more competitive electricity prices.

This is how it works: the electricity generation market in Peru is dominated by hydroelectric plants (rivers) and thermoelectric plants (natural gas), while RERs (wind and solar) only represent 5%, despite the fact that their production costs tend to decrease. low.

According to the Ministry of Energy and Mines (Minem), allowing them to participate in the bidding (sale) of electricity for distribution in the regulated market (homes, small industries and mypes) would drive prices down throughout the chain , in addition to encouraging more investors to build this type of platform. Currently, they do not have this possibility.

counter current

Nor will they. The correlate of weights of Fuerza Popular, Avanza País and Renovación Popular ended up turning off the opinion, although a second vote will be held in the next session of the working group led by Jorge Flores Ancachi.

The Vice Minister of Electricity, Jaime Luyo, explains that regulated users can pay for electricity 3 times more expensive than free ones (large companies, such as mining and cement companies) and 5 times more than the spot market (sale between the generators themselves). .

For Luyo Kuong, there is a “distortion” in the Peruvian market that, over time, attempts have been made to mend with cross-subsidies, such as the case of FOSE, in which residential units that consume more than 140 kWh/month are recharged on the receipt an additional to subsidize those who consume less.

He adds that, as in any law that seeks to put common welfare before private profitability, there will always be agents who disagree or defend the model, and in this particular one, a market with more competitors “directly affects the generators “traditional.

Electricity and natural gas

UNMSM professor Humberto Campodónico maintains that this Minem policy is in line with the Paris COP on clean energy development to which our country is subject, and in which almost no progress has been made.

Likewise, it affirms that a greater participation of the RERs in the regulated market will lead to healthy competition with the gas plants, since the costs of the RERs, wind and solar, have been reduced in recent years and do not need subsidies. He also affirms that the RER does not replace the natural gas that goes to massification in homes, especially for cooking food and hot water.

He adds that the “mass consumption anchors” that can be installed in the provinces with natural gas compete with the RERs in industrial and commercial supply, but not in CNG and, even less, in mass delivery to homes. He points out that “only 2.2% of natural gas consumption in Lima goes to the 1.4 million homes, while 65% goes to 30 thermoelectric plants. “This law does not affect the massification process,” he clarifies.

The key

Strain. According to BCRP, the price of electricity in Peru is the highest in the region. Chile, where gas is purchased at international prices to generate, pays less.

Fire. Peru has 33 operating non-conventional renewable energy plants (1,129 MW of combined installed capacity).

reactions

Jaime Luyo Kuong, Vice Minister of Electricity

“Hopefully it can be reconsidered; this result is not positive for the majorities. Congressmen must reflect on this blockade, since academics and specialists have been very concerned.

Humberto Campodónico, UNMSM professor

“Only 2.2% of natural gas in Lima is consumed in homes, while more than 65% goes to 30 thermoelectric plants. Even if your demand falls, there is no way that this law can affect the mass.”