Peru
Press Release

SPH proposes to use existing contingency reserve to address shortages of hydraulic energy due to droughts

Bnamericas

This Peruvian Hydrocarbons Society release was published using machine translation.

The Peruvian Hydrocarbons Society (SPH) suggests that the authorities carry out a technical and regulatory impact analysis on the rule that seeks that generating companies can produce electricity by accessing a greater amount of natural gas as a priority, in the event of a possible shortage of hydraulic energy caused by the El Niño Phenomenon.

It is important to remember that a key component to guarantee electricity supply to the National Interconnected Electric System (SEIN) during contingencies is the support of cold reserve thermoelectric plants or auxiliary capacity   which, although they do not operate regularly, receive compensation and are part of the reserve margin to produce electricity in emergencies such as the expected drought. In other words, the generators would have the capacity to cover the energy deficit in critical situations using other fuels instead of natural gas.

Additionally, the way in which this measure has been proposed and is intended to be implemented would generate a distortion in the country's energy security. This is because an analysis of the solution alternatives is not presented and the reason for prioritizing natural gas for electricity generation is not transparent, to the possible detriment of the regions and already established standards.

Today all the natural gas plants are on, their natural gas requirements are being met 100% and the pipeline that transports natural gas to the coast is operating at its maximum capacity (firm and interrupted). Allocating a greater flow of resources to electric generators would reduce the availability for those users of natural gas in regions that do not have the possibility of consuming another fuel.

If this proposal is approved, it could impact approximately 250,000 homes, businesses, CNG vehicles, and industries in Lambayeque, Cajamarca, La Libertad, Ancash, Arequipa, Moquegua, and Tacna, and will affect stability in an industry that the ministry itself is seeking to promote through the mass use of natural gas.

The SPH considers that the proposed rule would generate differentiated treatment, would affect predictability and clear rules of the game for investments, because it would not be aligned with national regulations and international best practices based on non-discrimination, discouraging investment in gas infrastructure, a key aspect for massification.

From the SPH we emphasize the importance of carrying out an exhaustive technical and regulatory study and of using the mechanisms already established for situations like the one we are experiencing, so as not to harm almost one million Peruvians who use natural gas in different regions of the country.

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