PERÚ - Observatory for Renewable Energy in Latin America and

Perú- Products I and II
c) Financing
The main difficulty to obtain financing in Peru was not counting on long-term
contracts for the sale of energy at a fixed price, granting a flow of income that
guarantees the return of investment. This aspect, added up with the two previous
ones, has determined that private investment look towards the construction of
Thermal Power Stations based on natural gas instead of Hydroelectric Power
Stations, as they need smaller amounts of investment and shorter construction
periods which let them generate incomes 4 years before a Hydroelectric Power
Station.
d) Bus-bar tariffs and Prices of Natural Gas
In accordance with the dispositions established in the regulatory framework up to
December of 2004, bus-bar tariffs 4 (MEM, 1992) that generators could hire for
energy sales to the distributors of the regulated market were fixed considering the
promotional price of the Camisea natural gas for power generators. Thus
determined lower tariffs, that taking into account the barriers described
previously, made less attractive the investment in Hydroelectric Power Stations. It
is convenient to point, that the first Thermal Power Station based on the Camisea
natural gas, started its operation on August of 2004. Therefore, the price of
natural gas has been indirectly a limitation factor in the development of
Hydroelectric Power Stations.
In addition, it is important to specify that the price of natural gas from Camisea,
was fixed considering that it is a deposit discovered by Shell which was later
returned to the State without any retribution to this company, so the costs
accomplished in exploration were not considered to establish sales prices of the
natural gas in wellhead for electric generators and industries.
1.4.1.2 Measures To Promote the Investment in New Generation Supply
The Law Nº 28832 is an important advance over the ECL, but it has some aspects
that need to work in. This Law has as an objective improving the rules established
in the ECL, in order to assure the sufficiency of efficient generation supply. Thus,
it is reduced the exposition of the SEIN to the volatility of prices and the risks of
extended rationing for lack of energy, assuring the final user an electric tariff
more competitive.
That Law is devoted to the promotion of investment in new generation supply,
like hydroelectric power stations, through the mechanism of “electricity supply
tenders convoked by the distributors”. The objective is reducing the
administrative intervention in the generation price determination through market
solutions, in order to promote an effective competition and new generation
investments.
4 
Bus-Bar Tariffs are set based on basic prices, defined in the Article 47º of the “Electrical Concessions
Law”, Articles 125º and 126º of its Regulantions, and the “Toll for Connection to the Main Transmission
System”. Basic prices are constituted by the power and energy prices in the reference bars, from which
prices are expanded by loss factors.
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