PERÚ - Observatory for Renewable Energy in Latin America and

Perú- Products I and II
are valued taking into account the power peak prices in the bar where the
transference is originated.
The short-term Marginal Cost is defined as the highest variable cost from among
all the generating units that are dispatched in a determined instant, being then the
cost of the dispatched energy the sames as the variable cost of the most expensive
thermal generator. Within this market there can be a great volatility in the energy
prices, due to the costs fluctuations in fuel oil and the supply of available
technologies with lower generation costs. On the other hand, the “Bus-Bar
Tariff” 6 represents the weighted expectation of the marginal price in a time
horizon, as its calculation interiorizes projections of supply and demand 7 and that
is why it does not follow the behavior of the marginal cost. The Graphic Nº 28
shows up the evaluation of the Spot Price and the Bus-bar tariff in the period
1999 – 2010.
Graphic N° 28: Evolution of Spot Price and Bus-Bar Tariff in the SEIN (1990-2010)
On the other hand, it is important to stand out that the Peruvian Hydric System
presents periods of low water among the months of May and November, so the
convergence of factors like reduction of hydric contribution, absence of low
operation costs projects, demand increase and high costs of fuels, could lead to an
increment of the marginal cost, which is transferred to the short-term market.
Moreover, the regulatory process may cause an increase in the marginal cost, as
sometimes it does not fulfill the operators’s expectations or does not interiorize
the real tendencies of the market, both in terms of demand projection and
incorporation of new projects, most of which do not materialize in many cases.
Generators that do not have contracted all their productive capacity with free
6 
It is applied to regulated market customers.
7 
Its calculation is based on information from the previous year, as a COES’s proposal, and is checked
and corrected with premises in accordance with the discretion of OSINERGMIN.
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