A reform of the Peruvian electricity market – such as that proposed by the Executive through its bill 4565/2022-PE – would allow power to be separated from energy in new tenders and, with this, encourage the entry of renewable energy sources (wind and solar ) to the isolated systems that operate parallel to the National Interconnected Electrical System (SEIN).
The electricity sector in Peru is undergoing a significant transformation with the introduction of isolated systems and the interconnected system. In this context, it is important to understand the key differences between these two models and how they affect power generation, transmission and distribution.
Luis Espinoza, General Manager of LAEQ Asociados, explains that, in the interconnected system, generators can buy energy in the Short Term Market (MCP) to serve their clients, which implies financial contracts instead of physical ones.
“In contrast, in isolated systems there is no MCP, and the supply contracts are physical. The transmission and distribution of energy are regulated by Osinergmin in both models, but in isolated systems, the generator and distributor are the same entity, except in certain cases like Iquitos,” details the specialist.
It is important to indicate that the National Interconnected Electricity System (SEIN) includes more than 7.6 million users, mostly regulated clients.
There are also four isolated systems in electrical distribution systems, which cover the areas of Iquitos, Puerto Maldonado, Moyobamba and Tarapoto (San Martín) and the area of Bagua and Jaén (Amazonas).
Changes to Law 28832 for the integration of renewable energies
The Peruvian electricity market has seen notable improvements in recent years, with significant growth in access to electricity and an increasing focus on the development of renewable energy.
In view of this, explains Espinoza, isolated systems offer a more convenient opportunity for the integration of RER, due to their dispersion in relation to the interconnected system.
“However, it is important to consider the supply contracts, given that if there is no guarantee of this then there should be no payment for power either,” says the representative of LAEQ Asociados.
It must be considered that the same SEIN rules cannot be applied to isolated systems, because greater contractual flexibility is needed for the development of renewable energy resources.
Promote the entry of more renewables
In the context of the global energy transition, isolated systems offer the opportunity for the development of renewable sources due to the costs of connection to the SEIN.
Likewise, Luis Espinoza maintains, electricity companies must “adapt and prosper through technological innovation and the integration of renewable energies in both models.”
“In conclusion, isolated systems and the interconnected system present different challenges and opportunities for the electricity business in Peru,” he said.
Although the former offer a more convenient opportunity for the integration of renewable energy, the latter allows for greater contractual flexibility and a greater ability to guarantee supply.
The data
- This year the twelfth edition of EXPO ENERGÍA PERÚ 2024, an event that will allow the exchange of experiences, lessons and learnings on how Peru and international markets are building and going through their electrical transformation process.
Source: Larepublica
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
