Congress sees today Renewable Energy Law to lower electricity prices

He Ministry of Energy and Mines (Minem) highlighted the importance of approving the bill that seeks to give greater impetus to renewable energies in the country, since electricity generation technology with solar or wind sources will contribute to competition and offer better rates for millions of homes and businesses in the country. Opinion will be seen today in the Commission of Energy and Mines of the Congress for the last time.

Minem’s Vice Minister of Electricity, Jaime Luyo Kuong, said that this initiative seeks to benefit more than 32 million Peruvians and thousands of industries and small businesses as it will encourage investment in energy at affordable prices.

“Otherwise, if the Bill is not approved, the rates of Regulated Users will continue to increase to the extent that there is no regulatory framework that ensures the carrying out of orderly supply tenders and the distribution companies give preference to subscription of contracts without bidding,” he declared.

He added that if new sources of generation are not incorporated into the National Interconnected Electric System (SEIN), the country will face a critical scenario since cheap generation in the SEIN is reaching the limit of its capacity.

Given this, generation plants that use diesel fuel, the most expensive, will have to operate with increasing frequency, as already happened in the months of November and December 2022, when the prices of the Short-Term Market energy passed from USD 40/MWh to USD 160/MWh.

Luyo indicated that the draft Law proposes a necessary framework for electricity distribution companies to carry out supply tenders in an orderly and transparent manner, in order to ensure electricity supply to their Regulated Market Users at prices that result from greater competition. with the participation of all generation technologies available in the market, including solar, wind and natural gas.

In this way, the competition of all the technologies in these tenders will allow obtaining better generation prices for Regulated Users, which are mainly residential users, small businesses and small industries.

“This, finally, should result in the electricity rates paid by these users beginning to decrease, to the extent that the supply contracts currently with high prices are being replaced by new contracts resulting from competition and with lower prices, in the new tenders”, concluded the vice minister.