Snapshot: The companies securing free client power deals in Peru

Free client power contracts have maintained their appeal in Peru, driven by competitive pricing and the flexibility that comes from shorter-term supply agreements, within a framework of guidelines depending on demand.

Offtakers connected to the national grid and whose maximum annual demand is 0.2-2.5MW may choose to be a free or regulated customer, while those below this range are subject to regulated prices and those above 2.5MW are considered free users.

Earlier this year, the congressional energy and mines committee approved a bill that would lower the cap for micro, small and mid-sized companies to 50kW from 200kW in a bid to access cheaper electricity.

Average free market price, in orange, and regulated price in Lima, in soles (Source: Osinergmin)

The number of free clients in 2023 totaled 3,206, up 2.5% compared with 2022 and a 74% jump compared with 2018, with the sale of power to this segment totaling 33,912GWh, according to energy and mining investment regulator Osinergmin.

In comparison, the number of regulated users at the end of last year reached 9,221,982 (93% residential customers) with sales of 20,057GWh.

The bulk of free market sales go to the mining sector, which in January accounted for 55% of offtake, followed by the metallurgical (5.9%) and food (4%) industries.

Free market power sales in Peru by industry in January 2024 (Source: Osinergmin)

LATEST CONTRACTS

Osinergmin information shows that 110 free client power contracts were signed in the first half of the year, led by Atria Energía with 27.

The power supplier touts itself to be the company with the largest number of free users in Peru, with over 500 clients in more than 20 sectors, and annual sales that exceed 1,100GWh.

The customers that Atria inked deals with in the first six months of 2024 included T&T Fruits, Industrias Nettalco, Ceramicos Galca, Cerro Negro Peru, Campos del Sur, Eurogroup, Farmacologicos Veterinarios, Maersk Logistics and Services, and Agro Alimentos Andinos.

Atria was followed by Enel Generación, now known as Orygen, with 13 contracts, which were signed with Confecciones Testimax, Grupo Molinero Contreras Astorayme, Industrias Elicar and Cementos Pacasmayo, among others.

For their part, Fénix Power and Kallpa secured 11 and 10 contracts each, while the table below shows the other companies and the number of deals they signed in 1H24.

Coelvisac	8
Enel Distribución, now known as Pluz Energía	7
La Virgen	7
Electronoroeste	5
Huaura Power Group	5
Electro Dunas	3
Kondu	3
Shougesa	3
Colca Solar	2
Seal	2
Celepsa	1
Electro Oriente	1
Hidrandina	1
Statkraft	1

OUTLOOK 

“After years of electricity oversupply and electricity contracts with very favorable price and risk conditions for customers, the most recent market signals point to a paradigm shift,” according to Macroconsult.

In a recent research note, the local consultancy highlighted the end of power “oversupply” and its impact on free customers.

For Macroconsult, last year’s increased dispatch of diesel-fired power generation led to a jump in the spot electricity price, something that free users had not experienced in years.

Nevertheless, the research firm points to improved hydrology that will stabilize prices in the near term, coupled with new wind and solar investments, but they will remain higher than those seen previously.