Peru

Abstract

Peru is favored by a stable and growing
 economy and the availability of indigenous sources of energy
 for electricity generation, hydro and natural gas. Installed
 capacity in Peru in 2006 was 6658 MW, of which 48 percent
 was hydro-based. However, regarding new investment in
 generation, there is reason for concern. Demand growth over
 the past five years has been 5-10 percent, with no signs of
 slowing down. At the rate of 10 percent demand growth, 400
 MW of new generation capacity is necessary each year,
 representing at least US$250 million annually of new
 investment. The present study on small hydropower contains
 the following sections: (i) introduction; (ii) technical
 potential for development of small hydropower in Peru; (iii)
 economic and financial viability of small hydro development
 in Peru; (iv) institutional and regulatory environment; (v)
 identification of barriers to small hydropower development
 and mitigation measures; (vi) international experience with
 small hydropower development; (vii) the potential impact of
 the Renewable Energy Decree; and finally, (vii) conclusions
 and recommendations.