MINEM: Project promotes competition to avoid increases in electricity rates for the population

The following is a machine translation of a Minem release

The Ministry of Energy and Mines (MINEM) stated that the Bill that modifies Law No. 28832 to ensure the efficient development of electricity generation, which is in the Plenary Session of the Congress of the Republic, will create the regulatory framework for all existing generation technologies - hydroelectric, thermal, solar, wind or others - to participate in electricity supply tenders.

In this regard, the governing body specifies that this Project does not grant subsidies to generation sources with renewable resources, nor does it grant them benefits to the detriment of other generation technologies, since it seeks to ensure that all regulated users benefit from more competitive public electricity service prices.

If approved, this legislation will prevent the upward trend in electricity rates from continuing in the future, as a result of the mechanisms of a more competitive market; otherwise, it will harm the economy of all Peruvians.

The MINEM also stated that the payment for power and energy generation represents approximately 50% of the electricity rate paid by regulated users (the population) in their monthly bills, so by achieving an improvement in the purchase prices of these products, it will contribute to achieving better rates in the future.

The Bill does not establish that the share of renewable energies will reach 30% of the national energy matrix in 2030, so the studies or estimates that have been carried out, based on this assumption, and which therefore predict an increase in electricity rates, have no relation to what is stated in the law.

On the contrary, the tenders carried out within the framework of the Bill will be carried out based on the real needs for power and energy supply identified by the distribution companies themselves, so the entry of new generation plants, of any of the aforementioned technologies, will only occur to the extent that they are required by the demand of the regulated users (population).

On the other hand, the MINEM pointed out that it is important to clarify that the bidding scheme for time blocks, proposed by this legal proposal, ensures the electricity supply 24 hours a day, 365 days a year, based on the joint operation of all the technologies that participate in these supply tenders.

He stressed that there is no risk of a power shortage, since only solar or wind power plants would be used, since the goal is to take advantage of the individual contribution of each generation technology to the comprehensive supply provided to users.