Technical Report: Commercial Opportunities in the Peruvian Energy Sector Client: Embassy of the Netherlands Prepared by: EnerTek S.A.C. Date: January 19, 2018 Authors Alan Clarke: General Manager, EnerTek Global [email protected] Ravi Sahai: Manager, Renewable Energy Projects, EnerTek Global [email protected] Tom Duggan: Mechanical Engineer, EnerTek Global 1 of 147 Technical Report: Commercial Opportunities in the Peruvian Energy Sector 19.01.2018 Version 1.0 Table of Contents Executive Summary ..................................................................................................................................... 7 1.0 Introduction ......................................................................................................................................... 10 2.0 Current Status of Peru’s Energy Sector ............................................................................................ 11 Energy Sector ......................................................................................................................................... 11 Energy Supply ..................................................................................................................................... 11 Energy Consumption ......................................................................................................................... 12 Electricity Sector .................................................................................................................................... 13 Electricity Generation ........................................................................................................................ 13 Maximum Electricity Demand (Power Demand) ........................................................................... 15 Effective Capacity (Power Supply) ................................................................................................... 15 3.0 Government Policies........................................................................................................................... 17 Renewable Energy ................................................................................................................................. 17 Natural Gas ............................................................................................................................................. 17 National Energy Policy of Peru ............................................................................................................ 17 National Energy Plan ......................................................................................................................... 18 National Renewable Energy Plan ..................................................................................................... 19 United Nations Framework Convention on Climate Change (UNFCCC) ..................................... 19 4.0 Renewable Energy .............................................................................................................................. 20 Market Trends ........................................................................................................................................ 20 Market Size ............................................................................................................................................. 22 Potential .................................................................................................................................................. 22 Solar ........................................................................................................................................................ 24 Market Trends .................................................................................................................................... 24 Resources ........................................................................................................................................... 25 Key Companies .................................................................................................................................. 26 Installed Projects................................................................................................................................ 27 Projects in the Pipeline ..................................................................................................................... 28 Wind ........................................................................................................................................................ 29 Market Trends .................................................................................................................................... 29 Resources ........................................................................................................................................... 30 Key Companies .................................................................................................................................. 31 Installed Projects................................................................................................................................ 32 Projects in the Pipeline ..................................................................................................................... 33 Hydro ....................................................................................................................................................... 34 2 of 147 Technical Report: Commercial Opportunities in the Peruvian Energy Sector 19.01.2018 Version 1.0 Market Trends .................................................................................................................................... 34 Resources ........................................................................................................................................... 35 Key Companies .................................................................................................................................. 37 Installed Projects................................................................................................................................ 38 Projects in the Pipeline ..................................................................................................................... 39 Biomass................................................................................................................................................... 40 Market Trends .................................................................................................................................... 40 Resources ........................................................................................................................................... 41 Key Companies .................................................................................................................................. 43 Installed Projects................................................................................................................................ 43 Projects in the Pipeline ..................................................................................................................... 44 Geothermal ............................................................................................................................................ 45 Market Trends .................................................................................................................................... 45 Resources ........................................................................................................................................... 45 Key Companies .................................................................................................................................. 46 Barriers for Renewable Energy Development ................................................................................... 48 Natural Gas Development ................................................................................................................ 48 Oversupply of Electricity in SEIN ...................................................................................................... 48 Participation of Renewables in SEIN ............................................................................................... 48 Prima ................................................................................................................................................... 49 Firm Capacity (Potencia Firme) ........................................................................................................ 49 Opportunities ......................................................................................................................................... 50 Grid Connected Energy Auctions: Solar, Wind, Hydro, Biomass and Geothermal ................... 50 Off Grid Generation in the Mining Industry: Solar, Hydro and Wind ......................................... 51 Rural Electrification: Solar and Small Hydro .................................................................................. 52 Distributed Generation: Solar, Hydro and Wind ........................................................................... 54 Feed In Tariff: Solar............................................................................................................................ 55 Geothermal Development ...............................................................................................................