Thermal Power Generation Equipment

An Expert's View about Electricity Generation and Distribution in Peru

Last updated: 24 Mar 2011


Demand in Peru for thermal power generation equipment has increased since the completion of the Camisea natural-gas pipeline in 2006. New simple and combined cycle plants have been completed or started and other thermal plants converted to natural-gas. However, new projects will depend on the availability of additional natural gas from projects such as the Southern Andean Pipeline. Equipment and materials for turn-key thermal power plant projects are selected by EPC contractors, considering the recommendations of the turbine manufacture. Developing relationships with these contractors and/or manufacturers is key to entering the market.

Market Demand

Peru has an installed capacity of over 6,000 MW, including approximately 3,200 MW of thermal power plants. Peak demand in 2010 was 4,578 MW, a 5.9% increase over 2009. Demand for energy is expected to grow at a rate of between 7% and 13% every year until 2016, primarily due to increases in household consumption and several mining projects scheduled to begin operations.

In 2010, Peru’s power generation was 58.5% hydroelectric and 41.5% thermal. Of the thermal power, 83% burned natural-gas, 9% diesel and residuals, 7% coal and 0.5% biomass. Private companies produced over 98% of the thermal power.

Though hydroelectric projects are awarded through competitive biddings organized by ProInversión, the government’s investment promotion agency, thermal generation projects are authorized by the Ministry of Energy and Mines through an application process. Key for companies proposing new thermal projects is securing the required supply of natural gas, until now almost entirely originating from the country’s Camisea gas fields.

The number of natural gas fueled thermal plants has increased since the Camisea natural gas pipeline was completed in 2004. These include large plants such as Edegel’s 492 MW Ventanilla and 281 MW Santa Rosa plants, Kallpa’s 565 MW plant in Chilca, Enersur’s 535 MW Chilca Uno plant and Duke Energy’s 192 MW Las Flores plant. Additionally, smaller diesel fueled plants have been adapted to use natural gas.

The first combined cycle thermal plant was Edegel’s Ventanilla, which was completed in 2006. Since then, Kallpa and Enersur have both initiated projects to convert their Chilca plants to combined cycle. Scheduled to be completed in late 2012, Kallpa’s $402 million investment will add 285 MW of capacity. Enersur’s $395 million investment plans to create an additional 303 MW of capacity by late 2013. Implementing combined cycle operations have allowed energy companies to increase energy output given a fixed supply of gas, a trend likely to continue as companies vie for gas contracts.

Two additional plants are currently being constructed in the Chilca area: AEI’s $655 million, 650 MW combined cycle Fenix plant and Termochilca’s 196 MW simple cycle Santo Domingo de los Olleros plant. Both projects have Camisea gas contracts and are expected to operational by late 2012.

While all the projects in the Chilca pole have established gas contracts, their ability to operate at capacity once they are all complete hinges on the expansion of the Camisea gas pipeline. The expansion plan submitted by Transportadora de Gas del Peru (TGP), the pipeline’s operator, has met resistance from government regulators, environmentalists and indigenous communities. Due to the lack of potential gas supply, there are no current plans for additional thermal power plant projects in the Chilca pole.

New thermal projects in the coming years are most probable near Ilo in southern Peru. They will rely on gas supply from Repsol (block 57) and Petrobras (block 58) and the completion of the Southern Andean Pipline being built by Kuntur Gas Transport that will supply natural gas from the Camisea fields to Ilo. The 675 mile pipeline is scheduled to be completed in 2013. The Ministry of Energy and Mines is considering the future authorization of a 1,500 MW plant in the area. Additionally, Enersur’s diesel and coal fueled plants in Ilo will likely be converted to burn natural gas, a combined capacity of 347 MW.

Enersur is currently building a $200 million 400 MW dual (diesel / natural gas) plant in Ilo that will serve as part of the system’s backup capacity. Completion of the plant is expected in 2012.

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Posted: 23 March 2011, last updated 24 March 2011