Characteristics of the Peruvian electrical sector
The Committee for the Economic Operation of the National Interconnected System (COES - SINAC) reported that in 2014 the energy demand in the National Interconnected Electrical System (SEIN) was 41,796 GWh. Such figure exceeds by 5.4% that from 2013, when a demand of 39,669 GWh was recorded. With respect to the capacity, the maximum demand was 5,737.3 MW, 2.9% higher than in 2013, which was 5,575.2 MW.
The effective capacity of generation units in SEIN amounted to 8674 MW in 2014; 45.8 % of which corresponds to thermal plants running on natural gas, 38.0% to hydropower plants, 0.9% to solar plants, 1.7% to wind farms, and 0.5% to biomass plants. The remaining generation share (13.0%) uses other fuels, such as coal, biodiesel and residual oils. Compared to 2013, the percentage of plants running on this type of fuels decreased in view of the relative increase of plants running on natural gas and the decommissioning of several units of Duke Energy in 2014.
Chart 2
In 2014, new generation facilities were incorporated to SEIN with the commercial start-up of the following plants:
- Huanza Hydropower Plant (96.76 MW), owned by Empresa de Generación Huanza.
- Runatullo II and III Hydropower Plants (20 MW each), owned by Empresa de Generación Eléctrica de Junín S.A.C.
- Fénix Thermal Plant (570.10 MW), owned by Fénix Power Perú (AEI).
- Marcona Wind Farm (32 MW), owned by Empresa Parque Eólico Marcona S.C.R.L (Consorcio Cobra Perú S.A.).
- Cupisnique and Talara Wind Farms (83.15 MW and 30 MW respectively), both owned by Energía Eólica S.A.
Additionally, Emergency Decree No.049-2008, “Emergency Decree that Ensures Continuity of the Electricity Service,” published on December 18th, 2008, remained in force and effect in 2014, with a first extension until December 31st, 2013 through Emergency Decree No.079-2010, and a second extension through Law No.30115 until December 31st, 2016. Such decree modifies the regulatory framework of the sector, with the following changes:
- The short-term marginal costs are determined under two assumptions: i) there are no restrictions for natural gas transportation or power transmission, and ii) an administrative ceiling is set (equal to PEN 313.5/MWh) for the marginal cost. Both measures result in an artificially low price for transactions in the short-term market, referred to as the spot market.
- In order to cover for the operating costs of units not profiting as a result of the aforementioned methodology, additional charges are incorporated into the main system connection toll. Consequently, costs are transferred to end consumers.
- Withdrawals made by distribution companies are allocated without contracts, based on the positive balance of annual efficient firm energy of generation companies. The additional costs incurred by generation companies to process these withdrawals are incorporated into the main system connection toll, which results in costs being allocated to the demand. It should be noted that in 2014 no demand was allocated to Statkraft Perú S.A. without contract.
Under these conditions, the average marginal cost in 2014 amounted to USD 24.07/MWh, 4.4% lower than 2013, which recorded USD 25.18/MWh. The highest monthly average of the marginal cost in 2014 was recorded in March, with USD 34.31/MWh.
In 2014, Directorial Resolution No.004-2014-ANA-DEPHM was passed by the Bureau of Multisector Hydraulic Project Studies of the National Water Authority (ANA) to extend for 2 additional years the validity of Directorial Resolution No.004-2013-ANA-DEPHM. With this resolution, the maximum and minimum elevations to be kept at the Junín Lake were approved. The maximum elevation was 13,419 masl, equivalent to a useful volume of 314.74 Hm3.