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Can electricity become Peru’s next up-and-coming export?

Can electricity become Peru’s next up-and-coming export?

Posted by PanamericanWorld on February 21, 2014

For every country in the world, energy is tightly tied to medium and long-term development by sourcing economic growth of industries and the well being of households, both of which demand increasingly more power each year.

In 2013, Peru generated +6% more electricity to reach 43.6 GW, and for 2014 it is expected to increase an additional +11% to hit 48.8 GW. Meanwhile, power generation installed capacity has expanded +16.5% over the past five years to reach 8,335 MW and is expected to grow an additional +29.5% by 2017, for a total 10,972 MW. This year so far, electricity generation has continued its growth trend, increasing +6.5% YoY in January and close to +7% during the first two weeks of February, according to BBVA Research.

Competitive costs in the electricity sector have fully attracted private investors recently. Nowadays, about 75% of the electricity produced in Peru is in private hands, mainly the groups Endesa (21.3%), Suez (20.6%), Globeleq (15%) and Duke Energy (5.3%). Recently, the National Interconnected Electric System (COES) evaluated and confirmed the technical feasibility of exporting electricity to Chile from the southern grid. The possibility is gladly welcomed by the neighbor country, given the potential efficiency gains from lower costs.

Yet, Peru has to fulfill the challenge of reversing the electricity deficit in the south, and Chile must deal with growing opposition against eight projects of hydroelectric and carbon-powered plants near the region.

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